Aviva blames levy rise as it ups health insurance cost 4pc

The increase is the fourth such hike announced this year.

Last week Laya said it was imposing rises of up to 16pc. The company – formerly called Quinn – had already increased premiums by 12pc.

VHI has also raised its premiums up to 8.5pc this year, while new player GloHealth has pushed up premiums by up to 8pc.

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Now the cost of some Aviva policies will jump by up to 6.4pc from March 31, which will cost families up to €172 extra a year.

Aviva boss Alison Burns blamed the Government decision to raise the cost of the levy on every health policy by €65 a year for adults.

The new levy, of €350 per adult, comes into effect on March 31.

The extra cash ends up compensating the VHI for having a majority of older, more expensive customers. It ensures that everyone pays the same premium for the same level of cover, irrespective of age.

Ms Burns said there was a massive jump in the number of insurance claims it was forced to pay out on last year.

"We are acutely aware that many customers are struggling to meet the cost of their health insurance," she said.

"That is why we have minimised increases on all plans and there are no increases on many of our entry level plans."

The increases will see the annual cost of Aviva's Level 2 plan go from €2,700 for a family of two adults and two children to €2,871 a year.

Dermot Goode of health insurancesavings.ie said both Aviva and Laya only introduced one-year contracts last year.

This means people who are insured with these companies and are due to renew after April or May have an opportunity to break out of their contracts early and get a cheaper policy.

"For others, the large number of premium increases means shopping around for better value cover is critical," he said.

Some 6,000 people a month are leaving the health insurance market.

hnews@herald.ie