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Impact of High Court decision on Risk Equalisation

The decision of the High Court to up hold the Risk Equalisation Scheme introduced on 1 January 2006 and rule against BUPA Ireland's challenge to its legality will have quite a serious impact on the market in Ireland.

This decision will not affect Vhi Healthcare or VIVAS Health group schemes but will have a serious impact on BUPA Ireland groups and although we do not believe that any immediate steps are required we do feel that companies should wait to hear BUPA Ireland's decision on their future in the Irish health insurance market.

BUPA Ireland now have to make a decision whether they will

• stay in market and continue to challenge to Supreme Court
• leave the market but continue to challenge
• accept decision and continue in market
• accept decision and leave market

For the public and company group schemes they too have a decision to take but if BUPA Ireland were to withdraw they will have till their next renewal date to choose a new provider as BUPA Ireland would need to honour the yearly contracts they have with their 460,000 members. However, it should be stressed that no such decision has been made by BUPA Ireland.

If BUPA Ireland stay in the market then a members decision will be dependant on what impact the imposition of Risk Equalisation payments will have on BUPA's premium costs.

BUPA Ireland have stated that they wish to study the judgement before giving a considered assessment but have also called for Government intervention in this matter.

We will keep you updated on developments following this High Court decision and the impact (if any) it may have on the Irish Private Health insurance market.

Watson Wyatt Irelands Healthcare consulting practice is uniquely placed to assist you through any decision process and can help you review your existing arrangements and provide independent advise as to how you might maximise your health insurance benefit offering and identify potential cost savings.

If you would like to find out more or get specific information please contact Aongus Loughlin at the following:

Email:aongus.loughlin@watsonwyatt.com
Direct dial: 01-6146872
Mobile : 087-2834983