The Government is increasing the stamp duty paid by insurance firms on health insurance policies, which is the first increase in three years.

The Government said that the 1% increase (€5) in the stamp duty for policyholders with advanced contracts is not only necessary, to support more affordable policies for older and less healthy people, but was also extremely modest, as the first increase in 3 years.

Ireland's health insurance market is underpinned by community rating, which means everyone pays the same price for insurance policies, irrespective of how old or sick they are.

The risk equalisation scheme redistributes funds, by way of credits, between insurers, to meet some of the additional costs of insuring older and sicker members.

These credits are funded directly by stamp duty levies, paid by insurers, on all health insurance contracts, written in the State.

Each year the Health Insurance Authority provides a report to the Minister for Health in September, recommending the risk equalisation credit rates and the stamp duty levies needed to fund them for the following year.  

Under the system, health credits are paid to the insurance company for people over 60, to help to meet their higher claims costs.

The stamp duty for products providing 'advanced cover' is being increased by €5 to €449 per adult and by €2 to €150 per child.

The stamp duty for products providing 'non-advanced cover' will be reduced to €157 (-€20) per adult and €52 (-€7) per child.

The Government said the stamp duties fund credits but the levies do not increase costs across the market.

The Scheme is exchequer neutral, neither a cost nor a benefit to the State.

The changes will be provided for in the Health Insurance (Amendment) Bill 2019.