Health insurer VHI has announced a price hike which will see the cost of some family policies climb by in excess of €400 a year.

The State’s largest health insurance provider said the average price increase across its policies would be 3 per cent with the hike set to come into effect from March 1st.

Anyone with a renewal date before then will not be impacted by the increase until early next year.

The company said the increase was necessary “to ensure that we continue to meet the healthcare needs of our members”.

In a statement it said the cost of delivering healthcare “continues to rise as more people access essential healthcare services and the cost of providing those services increases”.

The statement said that it saw private hospital claims costs rise by approximately 13 per cent last year and the volume of private hospital claims increase by approximately 8 per cent compared to 2024, reflecting the continued increase in demand and the higher cost of delivering care.

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Increasing costs across the healthcare sector both in Ireland and internationally are being driven by factors such as medical inflation, an ageing population, and the introduction of new drugs, technologies, and procedures, the statement added.

“We have seen an increase in the number of members accessing healthcare and this increased demand contributes to higher healthcare costs.”

The company said that its AdvancedCare Day to Day plan for two adults and two children would be climbing from €6,523.44 annually to €6,946.57, a monthly increase of €35.26 while the cost of its FirstCare 500 Day-to-Day plan for a family is to go up from €2,473.96 to €2,604.45, a month increase of €10.87.

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Managing director of VHI, Aaron Keogh said that while the biggest contributors to overall claims costs continue to be cancer care, orthopaedic treatments, cardiac care, digestive conditions and psychiatric care, its members “have access to healthcare in more ways than ever before, not only in hospitals but also through day care and ambulatory settings”.

He said the “rising demand for healthcare and the increasing cost of delivering it mean that we must adjust our pricing accordingly.”

He recognised that health insurance was “a significant financial outlay for our members, so we will continue to provide a range of plans at different price points to suit differing needs and budget”.

It is the third time in the last 12 months that the company has increased its prices. All the other leading providers of private health cover have also rolled out multiple price increases over the same period.

“In line with previous years, this increase was expected, as VHI typically reviews their rates in March and October each year,” said Dermot Goode of healthinsuranceireland.ie.

“As always, consumers need to be cautious with these average figures, as the actual increase could be significantly higher depending on the plan held.

“Fortunately, many consumers who renewed their cover in January and February will avoid this latest price hike for now. However, those renewing from March onwards will be facing two increases from VHI: this latest increase and the price change from last October.”

Addressing the latest price increase the Health Insurance Authority (HIA) said that while “insurers set prices based on factors such as medical inflation, claims costs and increased demand for healthcare, affordability must remain a priority”.

The authority’s chief executive, Brian Lee said that it was “committed to providing consumers with clear, impartial information so they can make confident decisions about their cover. It’s a good idea to review your health insurance annually, as switching or adjusting your plan can lead to meaningful savings. Our free comparison tool can help you find the best value based on your needs.”