VHI tells court of concern at 'risk selection'

The VHI has expressed concerns to the High Court that new companies in the health insurance market, while not making "risk equalisation" payments to the VHI pending the outcome of legal challenges in the Irish and European courts, are actively engaged in "risk selection".

Risk equalisation means other insurance companies must compensate the VHI for its older and less profitable customer base. The VHI, with 1.55 million members, has said the risk equalisation scheme is vital to the future of the community-rating scheme, under which health insurers must charge customers the same premium for a particular plan, regardless of their age or health history.

Denis McDonald SC, for the VHI, yesterday expressed concern that the Health Insurance Authority (HIA) has taken the view that a Supreme Court stay on the making of payments under the scheme applies not just to Bupa but to the Quinn Group, which took over Bupa's business here earlier this year.

Quinn, while its payments under the Risk Equalisation Scheme are stayed, continues to be actively involved in "risk selection", which the scheme was designed to discourage and counterbalance, counsel said. This had "very serious implications" for the VHI.

Counsel made the remarks after the Quinn Group yesterday decided not to proceed with an application for an injunction restraining any demands for Risk Equalisation Scheme payments pending the outcome of court proceedings.

Paul Gardiner SC, for the group, applied to adjourn the injunction motion generally after receiving a letter last week from solicitors for the HIA indicating the HIA's view that it could not, pending the outcome of legal challenges, make demands from the Quinn Group for payments.

The court also heard that the European Court of First Instance is expected to deliver a decision on February 12th next in relation to Bupa's claims that the scheme breaches EU law.

Mr Justice Liam McKechnie said yesterday that the only matter before him was the Quinn injunction application. He noted the interim stay on the implementation of the scheme had remained in place by consent up to yesterday, when it was envisaged the Quinn application for an injunction restraining demands that it make payments under the scheme would proceed.

However, as Quinn was now choosing not to move that application, it was for the lawyers for each side to advise their clients as to what was in place.

The court could not get involved in commenting on the observations by the parties, the judge said, adding he would make no comment on the precise nature of the stay granted by the Supreme Court to Bupa earlier this year and whether that applied to other parties.

The judge said he would adjourn the injunction matter generally and return the legal proceedings for review on January 29th next.