A High Court decision is due today on whether health insurance companies with younger customers should compensate rivals with older customers.
The court will deliver its verdict on the challenge by Bupa to the Government rule that it should pay an estimated €161 million to VHI over three years as part of risk equalisation.
The Government claims risk equalisation is essential to compensate VHI for having a high proportion of older and more costly members.
VHI has said it needs the compensation to maintain community ratings, whereby everyone regardless of age or health status pays the same premium for the same level of cover.
Bupa has claimed that the imposition of the scheme is contrary to Articles 43 and 49 of the EC Treaty because it limits its right of establishment and the freedom to provide services.
In rejecting those arguments, the State has contended that the risk equalisation scheme is constitutional and in accordance with European law.
It is feared if Bupa fails its court challenge, the British company could pull out of the Irish market, with subscribers having to transfer to VHI or Vivas. The case could also result in a price rise in private health insurance.