Emergency risk equalisation legislation was late last night being rushed through the Dáil and Seanad to close a legal loophole.
Fine Gael, however, opposed the legislation and the Labour Party abstained. Fine Gael's health spokesman Dr Liam Twomey said the Government did not seem to know where it was going with the legislation and had not made a case for its emergency introduction.
The Opposition parties had earlier objected to the fact that they were only informed of the legislation after 6pm last night and expressed concern.
The Health Insurance (Amendment) Bill was introduced by Minister for Health Mary Harney who said the measure "is required to support our system of community rating that ensures that health insurance is affordable for older and sicker people.
"It closes off any potential abuse of the three-year exemption from risk equalisation payments."
The Bill abolishes the three-year exemption for new entrants to the health insurance market, from making risk equalisation payments. This means that the cost of health insurance cover for older people has to be spread across all health insurance companies including new entrants.
Ms Harney said that existing legislation did not "encompass the situation which emerged with the announcement on January 31st by the Quinn Group that it had reached an arrangement with Bupa for a takeover for the latter's Irish operations".
The Minister stressed that she welcomed the Quinn Group's interest in entering this market. She had not seen the legal agreement between the Quinn Group and Bupa for the transfer of Bupa Ireland business to the Quinn Group.
"However, the Attorney General has advised that the potential exists for an incumbent or a non-incumbent to avail of the three-year exemption by particular corporate transactions in essence acquiring or restructuring the business of an existing player in the market."
She added that "in the Government's view, the securing of the exemption in this way would constitute a frustration of the intention of the Oireachtas when it passed this measure into law.
"The Government has been advised that this loophole should be closed off as a matter of urgency."
The Minister said that the Government "has decided, based on legal advice, that the most effective means of achieving this is to remove the exemption for new entrants in its entirety.
"The removal will before effective immediately the Bill now before the House is signed by the President. It will not affect the exemption which Vivas currently has and which expires in October 2007."
Dr Twomey said that his party fully supported competition. But the party wanted to know what was going on and why the legislation was so necessary.
The Government was getting rid of the three-year rule.
"To me, it seems that you are only getting rid of it because Seán Quinn is going to get away with it.
"Now, Seán Quinn, I am sure, is no fan of mine, and there is no vested interest in me saying that what you are doing here is going to damage competition in the private insurance market."
Simon Coveney (FG, Cork South Central) said the Government was admitting that they were not going to invite or encourage any new entrants into the Irish health insurance market.