The country's second-largest health insurer says it has no option but to increase the price of premiums.
Laya Healthcare says it cannot absorb the increases in stamp duty announced by the government yesterday.
Laya - which insures nearly half a million people - says the increase in stamp duty announced yesterday will cost Laya between 20 and 30 million euro a year.
It says it's simply not possible for the insurer to absorb an increase of that size - and the costs must be passed on to customers when the higher rates kick in next March.
The stamp duty is used to fund the 'risk equalisation' scheme, where some insurers are given extra funding to accommodate the fact that they have older customers who are more expensive to cover.
This afternoon the Health Insurance Authority has stressed that insurers should only have to pass on the rates if they have a predominantly younger base of customers.
This means that VHI - which remains the largest insurer of older customers - is not expected to pass on any charges, as it will be the largest benefactor from the increased payments.
Meanwhile the government's promised to look into ways to cut the price of health insurance across the board.
Enda Kenny told the Dáil that the costs of some procedures haven't fallen in twenty years, even though they've become much quicker and cheaper in recent years.
A government report to cut the cost of private insurance is due in the coming weeks.
