High Court rejects BUPA move to block risk equalisation

The High Court has rejected an attempt by the BUPA to block the introduction of "risk equalisation" in the Irish health insurance market.

Health Minister Mary Harney announced plans last week to bring in the measure on January 1, but BUPA challenged the move in the courts, claiming it would force the company to leave Ireland.

The British firm was seeking an injunction preventing Ms Harney from implementing her plan pending the outcome of a judicial review next summer, but the High Court today refused to grant the injunction.

Risk equalisation will require BUPA to pay tens of millions of euros to the VHI every year to compensate for the latter's less-profitable client base.

BUPA has only been in Ireland since 1996 and, as such, has younger customers who make fewer claims.

The VHI, on the other hand, has been insuring people since 1957 and many of its customers are older and more likely to utilise their insurance cover.

Risk equalisation is designed to correct this distortion in the market and protect the situation whereby everyone pays the same health insurance premiums regardless of their age or health status.

Speaking in court yesterday, lawyers for BUPA said the measure would cost their client huge sums of money and the company would ultimately leave the Irish market if risk equalisation was introduced.

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