FAMILIES and people on the lowest level of health insurance will be hit hardest by the Government's decision to hike the levy on all policies by 40pc, it was claimed yesterday.
Quinn Healthcare yesterday questioned the rationale for such a large increase in the levy, which is initially paid by insurers, but likely to be passed on to customers.
Quinn managing director Donal Clancy claimed the levy was nothing more than a subsidy to the state-owned VHI.
"This increase is bad news for consumers as health insurance customers continue to subsidise the inefficiencies of the unregulated VHI.
"Those customers on the lowest-level schemes continue to carry a disproportionate burden of the health levy," he claimed.
The levy for an adult has shot up by €80 to €285, an increase of almost 40pc. For every child with private healthcare, the levy has jumped from €66 to €95.
The levy is a system where a portion of the premium for customers is collected and redistributed to health insurers with older, more costly members. Most of the money ends up being redistributed to the VHI.
Health Minister James Reilly insisted that the large rise in the levy should not mean higher premiums for consumers.
"The measures are designed to result in no overall increase of premiums paid in the market and to spread the risk more evenly," he said.
"Health insurance is becoming harder to afford for older people as insurers increasingly tailor their insurance plans towards younger, healthier customers."
But Quinn Healthcare, which has 460,000 customers, said it would find it impossible to absorb the higher levy, and more people would be forced to give up insurance.
A rise of between 7pc and 25pc in Quinn prices took effect from the start of this month.
Aviva, which is due to impose a 15pc rise next month, said it would absorb the cost for now. But it would be forced to review its prices in the coming months.
VHI Healthcare, which has 1.2 million subscribers, welcomed the increase. It has eight times the proportion of members in the over-80 age group than Quinn Healthcare has and six times the proportion Aviva Health Insurance has, a spokeswoman said.
VHI is due to announce a new price hike in the coming days. But it claimed this week's hike would not be passed on.