The health insurance levy will go up by another €48 a year per adult from next April with the increase almost guaranteed to be passed on by insurers.
Those with private health insurance are facing yet another price increase next year as the Government has confirmed a rise in the health insurance levy.
The change will come into effect on 1st April and is likely to push up the cost of cover for hundreds of thousands of people already dealing with multiple price hikes across the sector.
What is the health insurance levy?
The levy, also referred to as stamp duty, helps fund Ireland’s community rating system, also known as risk equalisation. This system ensures that everyone can buy the same health insurance policy at the same price — regardless of their age, medical history, or level of risk.
In other words, younger and healthier policyholders help support the cost of covering older or less healthy customers.
This makes health insurance different from all other forms of insurance such as car insurance and life insurance where a person's age, health and individual circumstances can have a big impact on the price they pay for cover.
The health insurance levy is collected from insurers and placed into the Risk Equalisation Fund (REF). During the Covid-19 pandemic the levy was temporarily reduced due to lower-than-normal claims, but it has been increasing again in recent years.
How much is the levy increasing by?
The Health Insurance Authority (HIA) has confirmed the following increases will take effect from April 2026:
Advanced plans (the most common type of cover)
- Adult levy: rising by €48, bringing it to €517 a year
- Child levy: rising by €16, bringing it to €172 a year
Non-advanced (public hospital only) plans
- Adult levy: increasing by €9 to €103 a year
- Child levy: increasing by €3 to €34 a year
Advanced plans typically include access to both public and private hospitals and are the policies held by the majority of customers.
With the average adult premium now close to €2,000, the levy will soon account for over one-quarter of the cost of a standard policy. However it’s important to remember that if the levy wasn't in place, older and sicker health insurance customers would be paying premiums far in excess of what they’re paying now. For these customers, the levy is actually helping to keep the cost of their policies in check. For younger and healthier policyholders, it's the opposite.
The increase in the levy equates to around a 10% increase on the current charge. This means it's likely to add about €120 or €130 a year to the cost of cover for a typical family — and insurers are almost certain to pass on the full increase to their customers next year.
Why is the levy increasing?
A general rise in the cost of providing medical care, accessing new drugs, as well as an increase in the demand for healthcare, is largely behind the increase.
Sláintecare reforms are also adding pressure. One of the key goals of Sláintecare is to phase out private practice from public hospitals. As this change takes effect, far fewer procedures covered by health insurers are being carried out in the public system. Insurers are therefore relying more heavily on private hospitals instead — and these hospitals have been raising their fees significantly in recent years.
Why the levy matters
According to the HIA’s chief executive, Brian Lee, the levy is essential for keeping health insurance fair and accessible:
“Without the REF, older or less healthy consumers could face significantly higher premiums, or insurers might avoid covering them altogether.”
He added that most consumers support community rating, with recent HIA research showing:
- 64% agree with community rating (equal pricing for all ages and risk levels)
- 73% support open enrolment (insurers must accept anyone who applies)
The insurer that benefits most from the equalisation scheme is VHI, which has a larger proportion of older and higher-risk members.
Premiums already rising sharply
Consumers are already under pressure after multiple rounds of price increases from the major insurers over the past few years.
This year alone, VHI, Laya Healthcare, and Irish Life Health have all increased their prices twice. This means that many families were already looking at paying up to €500 a year more for cover come their next renewal, which for the majority of customers is between now and early January.
However the increase in stamp duty is almost guaranteed to be passed on too, meaning policyholders can expect yet more price hikes into 2026.
What to do when you're renewing your policy
Don't just let your policy auto-renew. You may be able to get cheaper cover.
Firstly, review your current policy benefits carefully, in particular the hospitals that you're covered for. We often talk about the dangers of under insurance. But in rare cases, you can be over insured too. If you’re happy with a semi-private room or a room in a public hospital, for example, there’s no need to pay for a fully private room in a private or high-tech hospital.
And if you’re not getting use from the outpatient and day-to-day benefits on your policy e.g. GP fees, consultant fees, and other services like physiotherapy, dietician, chiropractor etc., consider reducing these.
You could also look at increasing the excess on your policy — this is the amount you pay first out of pocket in the event of a claim.
And not everyone in your family needs to be on the same plan. Children and young adults often don’t need the same level of cover as an adult. If your teenage children are healthy, you can switch them to a lower-cost plan but keep everyone under the same policy.
And don’t be afraid to call your current insurer, give them your budget, and challenge them to find you a policy that works for you at a budget you can afford. Let them do the hard work. But don’t rely on your current insurer’s advice alone; inquire about lower-cost equivalent plans with other providers. Irish Life Health is currently offering a 5% discount to new customers who sign up through bonkers.ie until 31st December 2025.
If you switch within 13 weeks you won’t have to serve any waiting periods again. And if you switch insurers while you’re serving a new customer waiting period, the amount of time served with your first insurer will be taken into account with your new insurer. And regardless of your current health or claims history, any new insurer must take you on — by law they cannot restrict you from cover. Unlike other forms of insurance, your age and previous claims record has no bearing on the price you pay or the options available to you.
