On 7 March 2013, the High Court handed down judgment in favour
of the respondents in the case of BUPA Ireland Ltd & Anor v
The Health Insurance Authority & Ors (the
"BUPA Case").
The BUPA case related to the legality of the Minister for Health
and Children's (the "Minister")
introduction of a risk equalisation scheme (the
"Scheme") for insurers operating in the
health insurance market in Ireland through a series of statutory
instruments made under the Health Insurance Acts 1994 –
2001.
By way of background, the Scheme, as adopted in 2003, was based on
the concept of "community rating across the
market" in which so-called "intergenerational
solidarity" was assessed and imposed by reference to the
risk profiles of the entire community of holders of private health
insurance policies.
On the introduction of the Scheme, BUPA Ireland Limited (the
"BUPA") brought judicial review
proceedings challenging the Scheme on the grounds that, as adopted,
it infringed the Constitution, the EU Third Life Insurance
Directive and the competition and freedom of establishment articles
of the European Treaties. The respondents in the action were the
Health Insurance Authority, the Minister and the Attorney General
(the "Respondents").
In 2006, the High Court dismissed BUPA's claims holding
that:
- the introduction of the Scheme was within the Minister's powers; and
- although the Scheme had potentially distorting and anti-competitive effects and could be taken as intruding upon constitutional rights of property, it was nevertheless objectively justified in the interests of common good and did not infringe the rights or protections invoked under European or constitutional law.
The High Court's decision was successfully appealed to the
Supreme Court which in 2008 held that the Scheme, as adopted in
2003, was unconstitutional and ultra vires the power of the
Minister because the only scheme authorised to be imposed under the
Health Insurance Acts 1994 was a scheme based upon the
"within the plan" concept of community
rating. The Supreme Court set aside the 2006 High Court
decision and rendered void the statutory instruments that
established the Scheme.
In light of the Supreme Court's ruling in 2008, the matter was
remitted to the High Court for determination of the following
issues: (a) whether there was any liability by the Respondents for
damages to BUPA and, if so; (b) the amount of damages. These issues
were the subject of the recent High Court judgment delivered on 7
March 2013. The High Court held that BUPA had failed to
establish an entitlement to damages on any of the grounds
claimed.
Legislation for the introduction of a new risk equalisation scheme
was enacted in December 2012 to apply from January 2013. For
more information on the new risk equalisation scheme please refer
to the update in our Winter 2012 e-zine.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
