A new research report, “An Examination of the Potential Costs of Universal Health Insurance (UHI) in Ireland”, was published today (18 November 2015) by the ESRI. The study was funded by the Department of Health and examines the cost implications of the UHI model proposed in the 2014 Government White Paper.
The main findings of this study are:
Assumptions about UHI coverage:
The Government White Paper proposed that everyone would be insured for the same package of health services. The White Paper did not state which services should be covered by UHI but did specifically exclude some, like long-term care for older people. This study examines the cost implications of providing UHI through insurers for alternative baskets of health services, focussing on three:
The study presents a range of estimates reflecting uncertainty in relation to some key underlying assumptions. The detailed findings of this study of the cost implications of the White Paper model of UHI (in 2013 prices) are:
This cost is equivalent to the average (mean) UHI premium, if a simple flat-rate premium were to apply across all members of the population, i.e. if no distinction were made in relation to premia for adults, students and children, or in relation to ability to pay, which is not the assumed approach. The White Paper proposes that people on lower incomes would have their premium subsidised. 
The report estimates that the overall per capita cost of healthcare in 2013 under the current financing system was €4,184; with mean per capita taxation to finance healthcare of €3,223; mean per capita out-of-pocket payments of €504; and mean per capita private health insurance of €389 (averaged across the whole population including the uninsured and excluding tax subsidies).
Dr Maev-Ann Wren, Senior Research Officer at the ESRI and lead author of the report, said: “The proposed design of the White Paper financing model should be reviewed in light of the findings about the potential cost implications.”
“The Department of Health has been advised that the White Paper UHI model would be subject to competition law, which is not the case for universal healthcare financing systems in many other European countries. This limits the Government’s ability to control factors such as pricing and insurers’ margins. The proposed design of any alternative financing model should be reviewed in light of this limitation and the findings of this analysis.”
“This report has investigated the cost of the White Paper model of UHI. Further important questions that should be addressed before a system of UHI is introduced in Ireland were beyond the scope of this report. Other key enquiries about the introduction of a system of health financing based on UHI should include whether the model outlined in the White Paper would improve health outcomes, achieve equity, be cost-effective or whether the proposed model is feasible in an Irish context.”
 Department of Health (2014). The Path to Universal Healthcare: White Paper on Universal Health Insurance. Dublin, Department of Health.
 KPMG (2015), UHI Premia Costing Report, a report prepared for the Health Insurance Authority (HIA), has estimated a potential approach to mean adult, student and child premia.
 The further step of examining how such mean costs might be distributed across individuals or population groups was beyond the scope of this particular report but the issue of subsidy design and its distributional effects is examined in associated work by Callan and colleagues (Callan T., B. Colgan and J.R. Walsh “Income-Related Subsidies for Universal Health Insurance Premia: Exploring Alternatives Using the SWITCH Model”, ESRI Working Paper No. 516, ESRI: Dublin, available to download from the ESRI website here from 18/11/2015).
 The insurers’ margin is the term used in this report to describe the margin between insurers’ earned premium income and their expenditure on claims incurred and is comprised of: expenses and the cost of reinsurance; and underwriting profit or loss plus the impact of investments, which sum to profit before tax.
For Further Information Please Contact:
Dr Maev-Ann Wren (Senior Research Officer, ESRI): email@example.com
Notes for Editors
The ESRI works towards a national vision of ‘Informed policy for a better Ireland’. This means producing high-quality analysis to provide robust evidence for policymaking, with the goals of research excellence and policy impact.
The ESRI produces research that contributes to understanding economic and social change in the new international context and that informs public policymaking and civil society in Ireland.