Health insurer VHI has announced a price increase from 1 February, which will see premiums rise by between 15% and 45%.

60% of the VHI's 1.35m customers will see prices increase by 15% - meaning the average family premium rise by around €331.

Premiums for other plans could see increases of up to 45%.

How will the price rise affect you?

The company has blamed an expected 10% rise in claims this year and a 21% increase in the cost of private beds in public hospitals for the increase.

The company estimates that this will cost it €60m this year and accounts for 8% of the increase. A further increase in the cost of private beds is planned for next year.

VHI Chief Executive Jimmy Tolan said the decision to increase prices was 'incredibly difficult' and not made lightly.

He said the reality was the company was operating in a broken regulatory model which needs to be fixed.

The VHI lost about 48,000 customers in the last year. The last time the company increased its prices was this time last year.

The VHI claims that it has taken many steps in the last year to contain rising costs of health insurance, including cutting consultant and private hospital fees and a €15m reduction in annual administration costs.

The VHI has also called for changes to the levy system which replaced risk equalisation in 2009.

Mr Tolan has described the levy system as ineffective. He said changes need to be made to the tax credit system which provides tax relief on the cost of insuring older customers.

More information: 

RTE Money: Save hundreds on your health insurance by switching to company plan

RTE Money: I saved €262 a year on health insurance