The Supreme Court allowed BUPA Ireland and BUPA Insurance’s appeal and proposed an order quashing the Minister’s decision and the statutory instruments that introduced the 2003 health insurance risk equalisation scheme.
In a judgment delivered by Chief Justice Murray on 16 July 2008, the Court held that the scheme was based on an erroneous interpretation of “community rating” under the Health Insurance Act 1994, as amended. The judgment says the scheme was therefore ultra vires the Minister’s powers. The Court did not address the other issues raised in the proceedings.
The dispute concerned how section 12 of the Act should be read. BUPA argued that “community rating” had the meaning given by sections 2 and 7: insurers must charge the same premium to customers on the same plan, subject to the statutory qualifications. The Minister, the other participating respondents and the Voluntary Health Insurance Board argued that the phrase in section 12 referred to rating across the entire insured population.
The Minister’s 2003 scheme was designed on that broader basis. It had not been put into operation while the legal challenge was pending. The judgment noted that the scheme could substantially affect BUPA’s profitability and competition in the market, but said it was unnecessary to decide whether constitutional rights had actually been limited or whether any such limitation was justified.
The Court concluded that section 2 required “community rating” to be construed throughout the Act in accordance with section 7(1)(c), meaning rating within a health insurance plan. It found nothing in section 12 or the Act as a whole that required a different meaning. The Court said that if the Oireachtas intended a broader meaning for section 12, it would have needed to say so expressly.
The judgment distinguished the Court’s task from the policy case for a market-wide scheme. It noted that risk equalisation might be considered an effective means of pursuing policy objectives, but said choosing that approach was for the Oireachtas. The appeal concerned the lawfulness of the scheme as made under the existing legislation.
The judgment states that the appeal should be allowed and the High Court order replaced with an order quashing the Minister’s decision and the relevant statutory instruments introducing the scheme. It does not report a final order on the other claims, including damages or the requested declarations.