The VHI has written to the Tanaiste seeking a premium increase of 12.5% from September 1.
The decision was taken after a board meeting today where the VHI considered the implications of Tanaiste Mary Harney not introducing risk equalisation.
The increase will mean that members on VHI's plan B will now have to pay €61 more per year and the cost for a family will rise by €165.
Todays' meeting is a continuation of an emergency board meeting held last Tuesday - after Mary Harney decided not to go ahead with risk equalisation, which was recommended by the Health Insurance Agency.
Under the scheme the VHI would have received an estimated cash transfer of up to €30m from BUPA Ireland to compensate for the fact that VHI insures more elderly people. The VHI has already criticised the Tanaiste's decision. It said risk equalisation had been priced into its premiums since September 2004.
