The British health insurance firm BUPA is due to begin a High Court challenge to the introduction of so-called 'risk equalisation' in the Irish market today.
Under the measure, BUPA would be forced to pay millions of euro to its main rival, the VHI, as compensation for the latter's older and less profitable customer base.
The Government wants to introduce risk equalisation as the VHI has been in the market for some time and has much older customers who are more likely to need healthcare.
BUPA, on the other hand, has only been operating in Ireland for a short time and therefore has much younger and healthier customers.
Risk equalisation is seen as necessary to protect the practice known as "community rating", whereby everyone pays the same health insurance premiums regardless of their age or health status.
BUPA, however , claims the measure would cost it €30m per year and would force it to leave the Irish market.
The company has taken legal action questioning the constitutionality of the initiative, as well as its legality under EU law.