Health Minister Mary Harney has said she will look at all options in the coming months following today's Supreme Court ruling on the Government's risk equalisation scheme for health insurance.
The Supreme Court ruled that the scheme was based on a wrong interpretation of the law and should be set aside. It upheld health insurer BUPA's appeal against a High Court decision rejecting its challenge to the scheme.
Under the risk equalisation scheme, private health insurance companies 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.
Ms Harney said the Government's objective in health insurance has been that it should be affordable for older and sicker people. She said she would consult officials, the Attorney General and the Health Insurance Authority, and did not envisage 'any immediate decision' on legislation.
The Supreme Court ruled that the crucial issue in these proceedings was the interpretation of 'community rating'. The Government claimed that the community which must be rated for risk equalisation is the entire insured population within the private medical insurance sector.
Bupa claimed community rating should be worked out within each particular type of plan or policy - not across the entire insured population. The Supreme Court found Bupa's interpretation was correct.
VHI was due to receive payments of more than €40m from its rival. The payments had been postponed pending the outcome of this appeal.
The VHI said it was 'very disappointed' with the ruling. Chief executive Jimmy Tolan said it would take time to carefully review the decision.
In late 2006, the High Court dismissed the BUPA challenge, saying it accepted the state's evidence that without such a risk equalisation scheme, there was a threat to the stability of the health insurance market.
BUPA withdrew from the Irish market in 2006, but its business was later taken over by insurance group Quinn. Quinn has welcomed the judgement.
What is risk equalisation? An explanation
