Tánaiste Michael McDowell today denied any "sleight of hand" in the rushing through of emergency legislation that closed a loophole in health insurance legislation.
President Mary McAleese today formally signed into law the Health Insurance (Amendment) Bill 2007; it was only brought to the Oireachtas yesterday evening.
The law was introduced to stop new entrants into the health insurance market from obtaining a three-year derogation from paying into the risk equalisation scheme.
Minister for Health Mary Harney
The scheme operates on the principle of community rating, which requires policy holders of all ages to pay the same premiums. This means insurers who pay out less because of a younger client base compensate companies with older clients, who make more costly claims.
Labour Party leader Pat Rabbitte complained in the Dáil this morning about the late introduction of the Bill on the chamber's Order of Business yesterday.
"The Order of Business yesterday was fraudulent, and it led to another Order being put to the House after Private Members' Business last night when a very urgent matter had to be taken at minimal notice," Mr Rabbitte said.
Mr McDowell, who was representing the Taoiseach, said the Government only made a decision to proceed with the legislation yesterday afternoon.
Minister for Health Mary Harney
"The decision to bring the legislation before the House yesterday on an emergency basis was not made until the afternoon of yesterday.
"Therefore I reject the suggestion that there was any fraudulence or sleight of hand involved," Mr McDowell said.
The three-year derogation on risk equalisation was introduced to attract companies into the private health insurance market, which had been dominated by the semi-State VHI.
Bupa entered the market 6 years ago but late last year announced its withdrawal, claiming it could not afford to compensate VHI under risk equalisation.
The decision meant 450,000 policy-holders would have to seek a new policy either from either VHI or the much smaller Vivas and deepened concern about the lack of competition in the market.
Bupa's 300 staff at its headquarters in Fermoy, Co Cork were faced with redundancy as a result of the decision.
The threat receded last month when the Quinn Group announced an agreement to purchase Bupa for a reported €150 million, claiming it was entitled to avail of the three-year derogation.
VHI said that if it did not receive transfers from Bupa - estimated at between around €50 million per year - its finances would be thrown into chaos.
The Quinn Group - which is already involved in home and motor insurance, among other sectors - said it would participate in community rating and would accept older customers from VHI as means of "rebalancing" the market.
However, its claim to an exemption could have led to other companies transferring ownership on a regular basis to perpetually avoid paying into the risk equalisation scheme
Minister for Health Mary Harney said last night: "In the Government's view the securing of the exemption in this way would constitute a frustration of the intention of the Oireachtas when it passed this measure [risk equalisation] into law. The Government has been advised that this loophole should be closed off as a matter of urgency."
The new Bill will be effective immediately and will not affect the exemption for Vivas which expires in October this year, she added.
In a statement last night, Vivas called on the Government "to address the issues of VHI dominance . . . with the same pace at which this legislation has been introduced".
The purchase of Bupa has not yet been formalised, and a spokesman for the Quinn Group said the company would review its options in light of the new legislation.