The case taken by health insurer BUPA, challenging the European Commission's approval of a risk equalisation scheme in Ireland, has been dismissed.
Under the scheme, private health insurance companies like Quinn and Vivas are required to pay into a fund to effectively compensate State-owned VHI for having a large proportion of older and therefore more costly customers.
The European Court of First Instance ordered BUPA to pay the costs of the EC and VHI, which has welcomed this morning's ruling.
The Luxembourg-based court deals with complaints against the European institutions.
BUPA claimed the EC was wrong to approve the Government's risk equalisation scheme for health insurance.
In 2003, the commission said the scheme did not constitute a state aid or subsidy to the VHI.
The Court of First Instance described the Risk Equalisation Scheme as a system of para-fiscal taxes designed to harmonise the level of risk encountered by operators in the health insurance market.
BUPA claimed the scheme was a State-enforced subsidy to VHI, and was anti-competitive.
This was denied by VHI and the Government, which said risk equalisation was essential to its concept of community rating, under which people pay the same price for a health insurance product regardless of their age.
