A series of measures, which it is hoped will address the issue of rising private health insurance premiums, has been announced by the Health Minister, Leo Varadkar.

According to Minister Varadkar, the Private Health Insurance Package is designed to ‘make private health insurance affordable again'.

While the number of people with private health insurance grew by around 1,000 between July and September of this year, figures have been falling rapidly in recent times as a result of rising premiums.

According to figures from the Health Insurance Authority (HIA), at the end of June 2014, 2,017,000 people held inpatient health insurance plans. This was 11,000 fewer people when compared to the end of March 2014.

It was also 41,000 fewer people when compared with the end of June 2013 and is a big fall when compared to the peak of 2.3 million subscribers in 2008.

VHI remains the biggest insurer in the country, with just over half of all consumers purchasing plans from it. Laya Healthcare is the second biggest insurer, with almost one in four consumers opting for it.

Some 15% of consumers with private health insurance are with Aviva Health, while the newest entrant to the market - GloHealth - has 4%.

"These measures are designed to work as a package and make private health insurance affordable again for as many people as possible. We want to try and limit the need for increases in premiums, and even secure some reductions if possible," Minister Varadkar said of the new package.

It includes special lower premiums for young adults, a reduction in stamp duty, a reduction in the HIA levy and the introduction of Lifetime Community Rating.

The aim of Lifetime Community Rating, which has already been signed into law, is to encourage people to take out insurance ‘at a younger age, thereby helping to control premium inflation across the health insurance market'.

Community-rated markets depend on the ongoing entry of younger people, as they tend to claim less on their policies, which keeps premiums down for everybody.

Under this rating system, from May 1 2015, anyone aged 35 or older who wishes to take out private health insurance for the first time will be charged extra for doing so. From that time, insurers will be allowed to load premiums by 2% per annum from the age of 35,

Anyone aged 35 or older who wishes to take out private health insurance without being loaded against has until May 1 of next year to do so. Existing customers who continue to retain their cover will not be affected by the move.

According to the Department of Health, the HIA will run ‘ an extensive communications campaign to publicise this significant change to the health insurance market, to ensure that everyone understands the measure, has enough notice of its introduction and sufficient opportunity to purchase health insurance before the introduction of loadings'.

Meanwhile, when it comes to young adults, the Health Insurance (Amendment) Bill, which is to be published on Thursday, will provide for ‘young adult rates'.

"This will address the sudden increase in premium rates that occurs for most young adults after their 21st birthday, where premiums can increase by 100% or more. Insurers will retain the discretion whether or not to provide young adult rates," the department noted.

Minister Varadkar said that the new package includes key recommendations set out in the two Pat McLoughlin reports on health insurance costs, the first of which was published last December and the second one today. These reports had recommended, among other things, discounted rates for young adults and a scheme of Lifetime Community Rating.

"I think the time is right to try a new approach. The economy is growing again and more people are back at work. Following a long period of rising premiums and a severe decline in health insurance cover, the number of policy holders is now showing modest growth. I hope these new measures will allow that trend to continue and I hope the insurance companies will respond favourably," the Health Minister added.