Two of the countries largest health insurers have said they will not pass on the €285 government levy to customers.

VHI which has 1.2m subscribers said it will not be hiking its policy prices on the back of the government's decision to increase the levy by around 40%.

And Aviva Health Insurance has said it will absorb the additional cost of the levy for the moment for its 380,000 subscribers.

Quinn Healthcare, which has around 400,000 subscribers, has not indicated whether it will pass it on or not to policy holders.

It says it is disappointed with the increase and that such significant increases are difficult to absorb.

The levy was introduced by the former health minister Mary Harney back in 2009 to keep cover affordable for over 60 year olds.

The charge was imposed on every child and adult policy and started off at €160 for adults. The money was then distributed among insurance companies to help fund the higher costs of health care for older customers.

VHI is the biggest beneficiary - Fergal Bowers, RTE's health correspondent, told News at One that VHI has eight times as many over 80 year olds as Quinn and six times the number of over 80 years olds as Aviva.

The increase introduced by the Minister for Health James Reilly will take the levy up form €205m to €285m for adults and from €66 to €95 per adult.

Health insurance customers will not escape further increases on police costs however.

VHI is expected to increase its policy rates in February, reported Fergal Bowers, although not because of the levy.

At the end of November, Quinn Healthcare increased its premiums by an average of 12 per cent.

This time last year VHI announced a 45 per cent increase in some of its policies while Aviva, the third-largest private health insurance provider in the market, increased its prices by 14 per cent in March and by a further 9 per cent in August.

It has announced a 15 per cent increase from this year.