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 annual family premium will 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.
Elderly to be hit hard by increase
Age Action Ireland has said that increases of between 21% and 45% on Plans B, C, D and E options will inevitably put the cost of private health insurance beyond the reach of many older people.
Age Action Spokesperson Gerard Scully said 'that it is precisely the same cohort of older people, those retired on modest public or civil servant pensions, who were hit badly in the recent budget.'
The Irish Senior Citizens Parliament (ISCP) called the increase 'the final straw' for many older people.
The group's CEO, Mairead Hayes, urged the Health Insurance Authority to clarify whether the increase was sanctioned by the Authority.
This afternoon, Minister for Health Mary Harney insisted there was choice in the health insurance market - and she stressed there were no penalties for switching between companies.
She said there were 'no easy solutions' regarding health insurance.
Criticising the premium rise, Fine Gael Health Spokesman James Reilly claimed that families are now being asked to pay for the cost of recapitalising the VHI 'after years of Government inaction'.
'I warned Minister Harney repeatedly that her failure to introduce proper risk equalisation, and to substitute it with a levy, would have a catastrophic effect on people's ability to afford private health insurance', he said.
Labour's Jan O'Sullivan said the hike would place huge financial pressure on families.
'These increases will lead to situation where many policy holders will reduce or drop their health cover, placing yet more pressure on the public health system,' she said.