STATE-owned insurer VHI has cut the benefits on seven of its health plans so that it can qualify for a lower health insurance levy.
But instead of reducing the premiums on the same plans, it has raised them, the Irish Independent has learned.
Benefits will be reduced and premiums will rise by between 2pc and 3pc on the One Plan Starter, One Plan Starter Day to Day, Company Plan Starter, First Plan Level 1, First Plan Level 2, Family Plan Level 1 and Family Plan Level 2.
This will be the fifth hike in premiums since the end of 2011, and comes on top of a 6pc rise in other VHI plans, which took effect earlier this month. The increase in the seven plans will be effective from the start of next month – when a new levy system comes into being.
There will be two levels of levy on adult policies from April 1: €350 for what are termed advanced health policies, and €290 for non-advanced plans.
It had been feared that all health plans would attract the highest level of levy after regulators decided that every plan for sale in the market was an advanced one.
At the moment, all policies have a temporary levy of €285 for adults imposed on them. This money is put into a fund and redistributed to the VHI to compensate it for having many more older customers. The levy means that everyone pays the same price for the same level of cover, irrespective of their age.
However, a spokeswoman for the VHI admitted that the move to limit the benefits on the seven plans would mean they would qualify to be classified as non-advanced plans.
"We are amending seven of our products to meet the non-advanced criteria."
She said the changes would affect a limited number of diagnostic tests when performed in private hospitals – customers on the affected plans will remain 100pc covered to have the procedures performed in a public hospital or in private, stand-alone centres.
"The benefit reductions are very limited and the same factors which influenced our March pricing decision still stand, such as the increasing volume and cost of claims, an ageing membership, an ineffective risk equalisation scheme, and ongoing medical innovations, which, while welcome, have an impact on the cost of care."
One of the reductions in benefits means that instead of having the full cost of MRI and PET scans covered, only 66pc of the cost will be covered in private hospitals.
Laya and GloHealth have both released new plans that qualify for the lower levy, while Aviva has reduced benefits on one of its cheaper plans but not increased the premium, according to Dermot Goode of healthinsurancesavings.ie.