The Irish Times has reported that health insurers are urging Government officials to review the changes in tax relief on private health policies as it could increase costs for hundreds of thousands of people. Ireland’s four main insurers – VHI, Aviva, Laya Healthcare and GloHealth – have claimed that the Government have made a “fundamental miscalculation” about how many people they will affect with these changes.
Minister for Finance, Michael Noonan, has claimed that the changes would only hit people on ‘gold-plated’ policies but the insurance industry last night estimated that one million people could face tax increases of as high as eight per cent or €100 each.
Industry commentators believe that this move by the Government will lead to an acceleration in the numbers of people leaving health insurance or downgrading their policies which will put increased strain on both public and private hospitals. However, the Government are standing firm on their decisions with Minister for Finance, Michael Noonan, stating that the Revenue Commissioners have estimated in the run up to the budget that 577,000 people would be affected although they would only lose a small amount of their premiums.
The Department of Finance have released a statement explaining that most policy holders will only be marginally affected by the changes and recommend that people should “shop around” for cheaper cover, using the Health Insurance Authority’s website. The Department have described the move as progressive as those who pay the most for health insurance will be the ones most impacted. Health insurance tax cost the exchequer approximately Ђ500 million last year.
“Introducing an upper ceiling on this relief is intended to ensure continuing support, via the tax system, for those who purchase standard but good policies, while reducing exchequer exposure to the more expensive policies,” the statement said.