February 17, 2011
By Staff Reporter
BUPA took a High Court action to stop risk-equalization or “community rating” which the government says is intended to compensate insurers with older subscribers who are more expensive, and to prevent unfair competition in the market.
The courts however found in favor of the State and against BUPA on all counts. The firm said immediately following the judgment it would seek talks with the government, but said the ruling threatened its position in Ireland.
Two weeks of secret negotiations to find a compromise or way of amending the risk equalization scheme broke down last week. Any thoughts that BUPA may have been showboating to force a deal with the Government ended at a press conference on Thursday, where chief executive of its Irish operations Martin O’Rourke dropped the bombshell that it was to pull out of Ireland.
The company has 475,000 customers in the Republic. No new business is being taken on, while BUPA says that all existing customers will have their premiums honored until they expire, apart from those whose ongoing treatment would be covered by the policy. The pullout will be complete by 2008.
Rourke says that under risk equalization, BUPA would be forced to pay its larger competitor — the former state-owned VHI — around