Health insurers have warned that the Budget move to cut tax relief on private insurance premia will push up costs to the consumer.

Finance Minister Michael Noonan announded yesterday that tax relief on insurance premia paid each year will in future be limited to €1,000 per adult and €500 per child.

The Insurance Ireland Health Insurance Council says this move will have a significant impact on health insurance costs, with subscribers having to pay more for their policies.

The Council, which represents the main health insurers, said the Minister's assertion that the tax move would only hit 'goldplated' insurance cover taken out by wealthier people was incorrect.

It said the tax relief cap would impact on around nine out of 10 private health insurance products currently on the market.

The Council pointed out that the average health insurance premium people currently pay is €1,048 (€838 net of tax relief at source).

It said the Government had effectively imposed an extra tax on those who have struggled to keep their health insurance, and the new limit on tax relief means that premia will increase.

The Council wants the Minister to postpone the implementation date of the tax change to January 1 to allow health insurers to plan for its introduction.

It said if the change is introduced as proposed, from today, policy renewal bills which have already been sent out to customers will be incorrect, leading to significant confusion.

The Government's move to charge all private patients in public hospitals, regardless of whether they occupy a public or private bed, from next year is also likely to increase insurance premia.