'Health insurance ruling could hit older patients'

Chronically ill and older patients could suffer after private health insurer Bupa was told it does not have to compensate State competitor VHI, it was claimed today.

VHI, Age Action, trade union Siptu and Health Minster Mary Harney all said the Supreme Court decision would impact severely upon the country’s elderly and infirm.

Bupa, owned by Fermanagh billionaire Sean Quinn, won its legal battle against a government order forcing it to pay Vhi more than €40m because the State insurer had older and more costly patients.

The Supreme Court ruled Ms Harney’s interpretation of the so-called Risk Equalisation Scheme (RES) was wrong.

The Health Minister had argued the scheme was necessary to compensate Vhi for paying out more to cover health costs of older customers.

But the five-judge court found equalisation was not necessary to support community rating – where a person’s age does not determine the level of premium they pay.

Ms Harney later stressed the government’s objective in health insurance had been that it should be affordable for older and sicker people.

“The risk equalisation scheme, which has been struck down today, was the financial mechanism to support community rating,” she said.

“I intend to assess all available options in the coming months, and consult with officials, the Attorney General and the Health Insurance Authority.”

Vhi – which has 13 times more customers over the age of 80 than Bupa and 20 times more than another rival Hibernian Health – said community rating has always been central to the Irish health insurance system and risk equalisation necessary to implement it.

“Today’s decision may have serious consequences for older and chronically ill members of society,” Vhi’s Jimmy Tolan said. “It is our goal to try and ensure that private health insurance can continue to be purchased on acceptable terms by our more medically vulnerable customers.”

Bupa announced it was pulling out of the Irish market in December 2006 amid fears it would have to pay €161m to Vhi when a High Court ruled risk equalisation was necessary to support community.

Within a month Mr Quinn announced a takeover of the troubled health insurer and saved more than 300 jobs.

The head of the Quinn Group, yesterday bought a stake of almost 15% in Anglo Irish Bank after unwinding their interest in the bank held through high-risk investment products known as contracts for difference (CFDs).

Bupa was relaunched as Quinn Healthcare, which pursued the case through the courts.

It had claimed that community rating always meant community rating within a plan – that each insured person within a given policy must be charged the same premium irrespective of their risk profile, as for example, their age.

The state argued the phrase covered the entire insured population within the private medical insurance sector.

The Supreme Court unanimously ruled the RES was invalid because Health Minister Mary Harney had adopted it on the basis of an incorrect interpretation of the meaning of the phrase “community rating across the market for health insurance” as set out in the Health Insurance Act 1994.

Quinn Healthcare later said it fully supported a fair and competitive community rated market where access to private health insurance is fully available to all members of society.

“The Risk Equalisation Scheme previously introduced was clearly neither a fair nor appropriate means of achieving such a market,” a spokesman added.

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