The Government has underestimated the impact on consumers of its new tax relief limit on health insurance contributions, a lobby group has claimed.

The Insurance Ireland Health Insurance Council has said the Budget move will push up the cost of the average health insurance policy by €100 per adult.

The Government has reduced the maximum amount that can qualify for tax relief on a health policy to €1,000 for an adult and €500 per child.

The Insurance Council now says nine out of 10 adult private health insurance customers and over 90% of plans will be affected by this change. 

The claim by Government that this will only affect high cost 'gold-plated policies' is simply incorrect, the Council said.

It said prior to the tax relief change, the net average yearly health insurance premium cost per adult was €1,200 but would now increase to €1,300.

The Council claims there has been a 'fundamental miscalculation' by the Government of the impact ot the tax relief cap.

Michael Horan, spokesman for the Council, said the reduction in insurance tax relief combined with new public hospital bed charges of €30 million means that an additional €157 million will need to be raised by health insurers in 2014.

"This will ultimately have to be funded by customers through their premiums. We urgently call on the Minister for Finance to review this measure and consult with health insurers on the issue."