Aviva is to increase health insurance premiums by 14% from March 1.

The company said it has to increase the premium prices because of the cost of private beds in public hospitals, medical inflation of 9% and the health insurance levy.

The increase comes just three weeks after VHI announced it was introducing hikes of up to 45% from February

Aviva said if the health insurance levy was removed, it would be able to reduce its prices by up to 30% overnight.

The planned increase means an individual on Aviva's most popular plan will see costs jump from €848 a year to €967 a year. Families with two adults and two children will typically see their bill rise by €356 a year to €2,900.

Aviva said it "held off and held off" raising its prices and that the 30,000 customers who had already switched from VHI wouldn't face the increase for 12 months. 

 "People can still switch today and their prices will not go up till March 1," Jim Dowdall, chief executive of Aviva said on News at One.

It transpired, during an interview with Sean O'Rourke that Aviva implemented its annual price hikes in May last year but had brought it forward to March this year. 

Mr Dowdall insisted that Aviva had no choice but to raise the premiums.

"These prices are being artificially being forced up because of government levies," he said.

VHI's decision to increase its fees is said to have contributed to the decision by Aviva. Prohibitive costs could now discourage older VHI customers, and those more likely to be suffering from the 45% hike from switching to Aviva. 

The cost of Quinn Healthcare is also rising for those renewing from next Tuesday. Premiums are to rise by 8%, with some policies seeing increases of up to 25%.

VHI under fire for changing cover

The rising cost of health insurance comes as the Health Insurance Authority reviews the way VHI has substantially reduced the cover it offers for certain procedures under its most popular family schemes. 

According to the Irish Times the VHI plans that are being downgraded are the Parents & Kids schemes. 

Under the changes, cover for certain orthopaedic and opthalmic treatments is being reduced to 80 per cent of the total cost if in a private hosptial. 

The procedures include hip, knee and shoulder join replacement and cataract surgery.

"Let's say you get a hip replacement that cost €20,000, this could leave patients with a shortfall of €4,000," said Conor Pope, consumer affairs correspondent of the Irish Times. 

The plans will impact many families who were automatically switched to the scheme in 2009. 

More information

The Health Insurance Authority price comparison tool