Ruling due in BUPA move to block 'risk equalisation'

The High Court is due to issue a ruling this morning on whether to allow 'risk equalisation' to be introduced in the health insurance market on January 1.

The Tánaiste and Health Minister Mary Harney announced plans last week to bring in the measure, but BUPA is challenging the move in the courts, claiming it would put the company out of business.

The High Court is due to decide today whether to grant an injunction to the British health insurance firm pending the outcome of a judicial review into the risk equalisation scheme next summer.

The initiative would force 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 clients who make fewer claims.

The VHI, on the other hand, has been insuring people since 1957 and many of its clients 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 the High 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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