FAMILIES covered by the State-owned insurer VHI will see their health insurance premiums rise by up to almost €200 this year.
A typical family covered by one of the VHI's mainstream plans will see their premium rise by €192.34 this year following hikes of up to 9.5pc.
The premium for a family of two adults and two children, covered by VHI's Plan B Parents and Kids, will rise from €2,016 to €2,208.34.
The annual increase, which averages 8pc across all its plans, comes into effect from February once customers renew their cover.
VHI, the country's biggest health insurer with some 1.4 million members, claims it will lose 60,000 customers this year on top of the 120,000 who left in 2009.
It had 130,000 inquiries from customers last year who wanted to reassess their cover -- the majority of whom opted for a downgrade in an attempt to save money.
Although prices have fallen in several sectors in response to reduced incomes, the cost of health insurance continues to get dearer. VHI's rise follows average increases of 12pc and 15pc by Quinn Healthcare and Aviva.
VHI chief executive Jimmy Tolan last night defended the rises, which range from 6pc to 9.5pc. He argued they were significantly lower than its competitors even though its rivals only had 15pc of people over 60 years on their books -- the most expensive customers .
"VHI expects to generate total underwriting losses of at least €80m in 2009 and will have losses of over €170m in meeting the healthcare needs of its 280,00 customers who are 60 years or older," he said.
While the costs of treatments are falling, demand for care is rising and in the last five years the volume of procedures from its members in private facilities went up from 293,000 to 507,000.
The company claimed that, despite the increase, the cost of Plan B for a family of two adults and two children will fall from €2,256 to €2,252.14 because of reductions introduced last year.
VHI still only has a solvency level of 22pc, although it needs to be increased to 40pc by March 31 to meet the demands of the Financial Regulator.
This means that VHI needs additional equity capital and re-insurance with a possible financial bailout of some form from the State.
The company is to extend its "hospital in the home" service to 1,000 customers in Dublin this year allowing them to have procedures such as intravenous drips administered in their homes, rather than in hospital, at no extra cost.
This is to be extended to other parts of the country in the next three years and is part of a move to provide more services in the community.
Responding to the hikes, Stephen McMahon of the Irish Patients' Association said it was time for an independent review of the charges, and the fees charged by doctors and hospitals need to scrutinised to find out if they are being paid too much.
The Labour Party claimed the premium increase will put more economic pressure on already hard-pressed households.
Jan O'Sullivan, the Labour Party health spokeswoman, said price jumps could deter people from taking out insurance, placing extra pressure on public heath services.
"The announcement of an increase of 8pc in VHI rates represents a further turning of the economic screw on hundreds of thousands of hard-pressed families," said Ms O'Sullivan.
"The justification offered by private health insurance for increases over recent years was the rate of inflation. We are now experiencing significant deflation, but families are still being asked to pay even more."
VHI's competitors also criticised the hikes.
"We do not understand why this increase is necessary as the VHI will be net beneficiaries to the tune of €40m from the Government-imposed health insurance levy," Quinn Healthcare general manager Donal Clancy said.
Aviva chief executive Jim Dowdall added: "Two-thirds of VHI customers now face a price increase of 9.5pc. And despite VHI's attempt today to mask reality, the most significant increases are on families and individuals."