AS AN international expert on health insurance, I am aware of the recent policies introduced by BUPA into Ireland that threaten to break up the social solidarity and community rating that the Irish have enjoyed for the past 25 years.

In October I visited Ireland to speak to leaders from throughout Europe about how to introduce competition without threatening social solidarity, and I would like to offer a few comments on this situation.

First, the Irish are blessed with a solid and steadily improving public health care system that provides good services to everyone in need of medical attention. Second, a voluntary insurance scheme has arisen over the past few decades that provides upgraded services to anyone who wants to buy the policies, regardless of age or health condition.

The public system now depends to some degree on the voluntary insurance to take some of the pressure off public expenditures and taxes.

Competition might make this arrangement more efficient or give subscribers better value, but only if competitors are prohibited from "winning" by discriminating by age, illness or health risk, or by paying for fewer services.

The Health Insurance Act of 1994 attempts to provide just such safeguards by advocating competition on a level playing field of community rating. Unfortunately, at key points the Act uses quite vague or ambiguous language about what community rating means and what it covers; so that the noble intention of the law is subject to abuse. It needs considerable tightening up.

The stakes are high and so are the profits to a competitor. Researchers estimate that just 10 per cent of a large pool of people consume nearly 75 per cent of an insurer's costs. Imagine how many millions you can make through "competition", not by offering better or more efficient services and policies, but by sidestepping some of those 10 per cent.

Yet they are just the people for whom health insurance exists, because they are really sick.

Researchers have also found that the very sick change each year. Next year, one of them could be you, or me, or someone we love.

HOW, then, can Ireland or any nation introduce competition without its under mining community rating?

Basically, community rating means that everyone shares equally the burdens of the sick and injured. Across time, it means that younger subscribers pay more than their medical costs so that when they get older and their costs go up, they pay no more and can still afford health insurance.

The public system is community rated too, because taxes are levied regardless of age or health condition.

People commonly think that community rating means charging the same premium to anyone for the same health insurance policy, but that is only the start. For clever insurance executives can risk rate in several other ways.

The BUPA Cash Plans that charge a wee bit less to the younger and a good deal more to their parents are only the simplest form of risk rating. Much more direct are policies that exclude coverage for specific illnesses or risks. Or, you can risk rate by not covering certain kinds of services, like mental health services.

Next, you can offer different policies with different packages of coverage that happen to attract different risk groups in the population and then charge them for their risk profile. That is to say, you can "community rate" each policy but risk rate the market as a whole.

You don't have to risk rate directly but just build it into the design of your policies. The Health Insurance Act is wide open to such strategies whereby competition will lead to segmentation and discrimination rather than to efficiency and value for money.

American insurers could drive a herd of Texas long horns through the vague phrases of the 1994 Act. Besides risk rating by exclusion, coverage limits and policy design, they have developed a whole series of ways of risk rate subscribers after they sign on. These can be summarised in a phrase make life miserable for them.

Take your time reviewing and approving a given procedure. Maybe the patient will be dead by the time the approval comes through, as has actually happened in the US. Decide as often as possible that a medical procedure was not "needed" and therefore pay nothing.

Rule that in patient services could have been done on a day case basis and pay the patient the lesser amount. Challenge claims submitted on any conceivable grounds and send your rejection notices in computerese that takes a university degree to figure out.

If pre existing conditions are excluded, exclude any other illness that might be related to it exclusion by association. Say you will pay "reasonable" or "customary" fees, but have a schedule of such fees that is five years out of date so that the insurer pays less.

I THINK you get the idea, and of course the more serious your health problem the harder these six strategies will hit. The Health Insurance Act needs to prohibit them.

One final warning. Risk rating of any kind breaks down community rating. You cannot have both. In England, the cherry picking of private insurers steadily undermines the legitimacy and community rated basis of the National Health Service. This happens because English law does not establish a level playing field for competition in health insurance, as Dutch and Canadian law do.

Now that these risk rated private policies are widespread, the English cannot get rid of them.

If you believe in fair competition that rewards better value rather than cherry picking, you need to stop all forms of risk rating before they begin.