A new player is challenging the status quo in Ireland’s health insurance market — and Brussels is now involved.
Level Health, a relatively young Irish health insurer that set up shop just a year ago, has filed a formal complaint with the European Commission in Brussels. The complaint targets the Irish State’s long-standing subsidy mechanism — a scheme meant to assist older citizens and those considered higher health risks — but which, according to Level Health, has turned into an unfair advantage for the State-owned giant, VHI.
At the heart of the controversy lies the Risk Equalisation Scheme (RES), introduced in 2003. The RES was designed to keep premiums fair across age groups by balancing costs between insurers. Yet Level Health argues this system has drifted far from its original purpose. “We’re not against risk equalisation,” said Jim Dowdall, CEO of Level Health, in an interview with The Irish Times. “It’s essential to ensure fairness, but the way it operates now is deeply flawed.” The company insists that, instead of leveling the playing field, the current structure stifles competition, narrows consumer choice, and steadily drives up private insurance costs.
But here’s where it gets controversial: Dowdall claims that the RES effectively props up VHI, making it difficult for other insurers to compete on equal terms. The issue, he says, comes down to the flat-rate levies applied to all policies — a one-size-fits-all approach that punishes younger customers, especially those entering the market for the first time.
Currently, the stamp duty levy on most adult insurance policies is €469, and it’s set to increase to €517 in April 2026. For comparison, someone in their 20s buying an affordable health plan for around €900–€1,000 could find that nearly half of their bill is made up of this levy alone. Meanwhile, a premium health plan costing over €10,000 a year — typically purchased by older, wealthier customers — sees the levy make up less than 5% of the price. That imbalance, Dowdall argues, is exactly what keeps younger people from entering the system — undercutting the idea of shared risk the scheme was supposed to promote.
Under Ireland’s community rating system, everyone pays the same amount for a given health policy, regardless of their age or medical condition. Behind the scenes, insurers whose customers have higher-than-average medical costs receive payments from the RES fund to offset those risks. But Level Health contends that this redistribution model has become outdated and tilted in VHI’s favor, discouraging innovation and punishing new entrants.
What makes the debate even more heated is timing: the Department of Health is reportedly considering a 10-year extension to the current scheme when it expires in 2027. Level Health believes that extending a flawed system this far into the future could lock in structural imbalances and render meaningful competition impossible until the late 2030s.
In its complaint, the insurer alleges that Ireland’s implementation of the RES breaches European Union law in several ways — including abuse of dominance, unlawful state aid, and infringement of the freedom to provide services. Each, if proven, would contradict the EU’s foundational Treaty on the Functioning of the European Union, which ensures fair competition within the single market.
This isn’t the first time Ireland’s RES has faced scrutiny in Europe. Decades ago, Bupa’s former Irish division — the first company to challenge VHI’s monopoly back in 1996 — brought a similar case to both Irish courts and the EU’s second-highest court in Luxembourg. Bupa lost that case in 2008, but the debate never fully died down. Since then, other major players like Laya Healthcare and Irish Life Health have also voiced complaints or made formal submissions to Brussels over the same issue.
Level Health — 50% owned by Aviva Insurance Ireland — has grown quickly since its launch. With roughly 25,000 customers and over €30 million in written premiums after just one year, its ambitions are bold. Dowdall predicts the company will surpass €100 million in premiums within two years and triple that figure to €350 million within five.
So, what do you think? Is Level Health exposing a genuine flaw in Ireland’s health insurance system — one that favors legacy institutions over fair-market competition? Or is this simply growing pains for a newcomer trying to disrupt a stable but complex system? Share your take — should Brussels step in, or should Ireland be trusted to reform its own rules?