State to try this week to overturn Bupa injunction

The State is to go to the High Court later in the week in an attempt to overturn an interim injunction secured by health insurance company Bupa Ireland.

The injunction restrained Minister for Health Mary Harney from implementing a controversial risk equalisation scheme in the sector from January.

Last Friday Bupa Ireland obtained an interim injunction just hours after Ms Harney announced she was accepting a recommendation from the regulator in the sector, the Health Insurance Authority, and was introducing the scheme.

Bupa argued in court that the measure, under which it could have to pay up to €33 million a year to its main rival, the VHI, would drive it out of business.

If Bupa's interim injunction stands, Ms Harney will not be able to introduce the scheme pending a full hearing of a legal challenge which is being brought by the company. This is scheduled to be heard by the High Court in February.

Following the decision to grant the injunction, the Department of Health sought advice from the Attorney General's office. It is understood it believed that it would not be appropriate to leave the issue until the full hearing of the legal challenge in February.

It is understood the State will go back to court, possibly tomorrow, to try and have the injunction lifted.

Risk equalisation is effectively a compensation system within the private health insurance industry under which companies with a relatively larger number of older subscribers (who tend to claim more frequently) receive payments, via the regulator, from rivals with relatively younger membership profiles.

Various expert groups have advised the Government that risk equalisation is essential to underpin the concept of community rating where everyone pays the same for health insurance regardless of their age. Bupa contends that it is an unlawful infringement of its property rights, is unconstitutional and contravenes European law.