Health insurer wins landmark Irish court case.
Bupa has won a landmark Supreme Court appeal in Dublin against the introduction of the risk equalisation scheme in Ireland’s private medical insurance (PMI) market.
Ireland’s health system ensures community rating in the PMI arena, which means all adults pay the same amount for a given level of service, regardless of age, sex or health status.
Since all insurers must charge the same premiums, regardless of a policyholder’s risk profile, it was thought that insurers with less healthy customers could lose out financially.
The risk equalisation scheme was intended to spread the claims of high-risk customers among all insurers in proportion to their market share by forcing insurers to pay an equalisation contribution into a fund.
The scheme was supposed to come into force in 2005 but was deferred pending the outcome of Bupa’s challenge.
UK-based Bupa opened a PMI office in Ireland in January 1997, but closed it in December 2006.
Speaking about the appeal victory in Dublin, Fergus Kee, managing director of Bupa Health Insurance, said: “We have just received the judgment and will study it in detail with our legal advisers. We are pleased with the court’s decision.
“Bupa left Ireland with great regret. We had developed wonderful relationships with our customers and we had a world class team. We had no option but to leave at that time, given the scale of the mounting risk equalisation liabilities.”
Bupa declined to comment further.
UK insurers are also fighting to protect risk-based pricing. They recently won an exemption from the EU Gender Directive which calls for equal treatment of men and women in goods and services. They hope to do the same with the Equality Bill that proposes a ban on age discrimination in the provision of goods and services.