VHI has said it expects up to 200,000 people to give up private health insurance by the end of next year as a result of rising unemployment.
More than 2m people currently have private health insurance in Ireland.
The Patients' Association has warned that such a scenario would put huge pressure on public health services and could lead to higher prices in private insurance.
VHI, which has a 66% share of the market, has already lost 70,000 customers to the end of July.
The company has introduced a redundancy package for people that have become unemployed.
If they renew their policies within 12 months they will not have to wait to get their benefits.
Quinn Insurance says it has gained 26,460 VHI customers, while Hibernian Aviva has gained 35,000.
The insurance regulator Liam Sloyan said although there was a marginal decline in the market, it was still very resilient.