Health Minister James Reilly has announced a hike in health insurance levies payable by insurers from next year under the risk equalisation system from next year

The levy rise is likely to contribute to further increases in health insurance premia. The levy increase follows the controversial cut in tax relief on insurance premiums announced in the recent Budget.

The levy, or stamp duty, payable by insurers from next March will increase for more expensive insurance propucts providing 'advanced' cover from €350 to €399 per adult and from €120 to €135 per child.

The Minister said there would be no change to the stamp duty payable on lower cost 'non-advanced' health insurance and this, he said, would help to ensure that the option of lower cost health insurance remained available.

"Given the cost pressures many households face, I was very reluctant to recommend increases on stamp duties at all, even for products providing 'advanced' cover. However, my priority is to direct support where it is most needed and these revised risk equalisation credits will subsidise health insurance for our most vulnerable patients," the Minister said.

Under risk equalisation, insurers with a greater number of younger and less expensive subscribers subsidise those with a greater number of older and more expensive members.

This subsidisation of insurance cover for older people is funded through a system of credits,which is in turn funded by levies on insurers.

Minister Reilly also said he will shortly receive an independent report which will make recommendations on addressing high costs in the health insurance industry.

"It is critically important that private health insurers take all action necessary to drive down high costs in the Irish healthcare sector, in a well-regulated and competitive market," Dr Reilly said.