The second largest health insurer plans to withdraw an entry-level policy - just weeks after putting it in place to attract thousands of people to take out cover for the first time.
Laya will also be hiking the prices on some other low-cost plans, the Irish Independent has learned.
The insurer has been accused of "selling its customers a pup" after it emerged it will scrap its Assure First plan from July 1.
It was regarded as good value. It covers public hospitals only, but was priced at €395 for adults and €100 for children.
It was only introduced on April 13, specifically to attract some of the thousands of new members who joined the market before the end of April to avoid severe new penalties.
Health insurance expert Dermot Goode said it was unprecedented for an insurer to launch a plan and then withdraw it two months later.
"I am surprised that Laya is doing this and I would question why it is putting a product out there and then pulling it weeks later," Mr Goode, of TotalHealthCover.ie, said.
He said many of those who bought Assure First had to scrape the money together to afford it.
"These people will have barely afforded the plan. They will now feel they have been sold a pup because they may face a big price increase when they have to renew their cover," Mr Goode said.
And one of the next cheapest plans is going up in price by almost €70 a year for adults. Laya's Assure Vitality will cost €499 from July 1.
It comes after Aviva said it will increase the cost of its Select Starter entry-level plan. It will go from €425 to €472 in July, a rise of close to €50.
All four health insurers launched low-priced, entry- level plans ahead of penalties that came into force last month.
Called life-time community rating, the new rules mean penalties being imposed on the over 35s who take out cover for the first time.
Some 74,000 people responded to the new rules by taking out health insurance for the first time.
Asked if it was not engaged in sharp practice and being cynical by removing the plan, a spokesman for Laya said: "No, we always do right by our members."
Laya boss Dónal Clancy insisted that just 1pc of its customers bought Assure First.
The insurer has around 500,000 members, which implies that around 5,000 people signed up for its Assure First scheme.
Meanwhile, Glo Health is increasing the cost of two plans. The low-cost Net One plan will go up 3pc to €510.