What About Ireland?

The Irish healthcare system continues to evolve.  The most recent changes have taken place in the private sector and have been directed by the courts.  The most recent developments reaffirm the desire of the Irish government to share some of the responsibility for the nation’s healthcare burden with the private sector in a market environment.

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As early as 1957 the Irish public healthcare system provided free access to hospital services to lower and middle income individuals.  The wealthiest 15% of the population was excluded from public coverage and was expected to purchase its own healthcare.  In 1957 Ireland also passed the Voluntary Health Insurance Act.  This act established the Voluntary Health Insurance Board, now known as the VHI, a not-for-profit government sponsored entity (a statutory corporation with legal status similar to the Public Broadcasting System in the U.S.) that provided, and still provides, the equivalent of “private” health insurance. 

The VHI had a monopoly-like status over the private health insurance industry until in 1994, in response to a directive of the Council of European Communities, Ireland passed the Health Insurance act of 1994 and invited other private health insurance companies into its market.  Consequently, the Irish healthcare market is now divided between the public sector (about 51% of the population), the VHI (about 39%), and competitive private health insurance companies (about 10% of the population.)  Individuals are given a tax benefit for enrolling with either the VHI or a private health insurance company.  Forty-nine percent of the population take advantage of this and leave the public plan favoring a private plan or its near equivalent, the VHI.

Among the policies enacted for the VHI in 1957 were community rating, lifetime cover, and open enrollment (“lifetime cover” and “open enrollment” being the equivalent of “guaranteed issue.”)  Then in 1979 the remaining 15% of the population was granted publicly funded hospital enrollment.  This was enacted as a default enrollment policy so that now the population had universal coverage for hospitalization. 

The 1994 act had opened the market to private insurers and retained the policies for lifetime cover and open enrollment.  In 1996 Insurance Regulations based on the 1994 act added regulations for standard minimum benefits.  (Whether this was enacted as the political response to pressures for “social justice” or for humanitarian reasons or for economic reasons I do not know, but this much is apparent: the Irish now had a system with universal enrollment (on a default basis), community ratings, guaranteed issue and minimum benefits.)  The 1996 Insurance Regulations also provided for a “risk-equalization” plan, essentially a reinsurance plan to distribute risk across the entire population.