The Minister for Health, Mr Martin will this week consider a VHI application for a price increase of up to 8 per cent, less than a year after subscriptions rose by 18 per cent.
The Department yesterday confirmed it received a letter from the board of the State-owned Voluntary Health Insurance company, seeking the premium increase.
It is understood the Minister has not yet seen the application which was received in the office on Friday evening, but is expected to consider it this week.
The increase being sought is 8 per cent for subscribers on the company's standards plans and 7 per cent for the higher cost "options" plans.
Since the last VHI increase the Government has increased the price of a bed to insurers.
The VHI move was yesterday criticised by Opposition parties and the Consumers' Association.
Fine Gael's health spokeswoman, Ms Olivia Mitchell, said yesterday that the "frightening" increases in the cost of health meant that the private sector should become involved in the running of hospitals and there should be increasing competition in health insurance.
"There has to be some mechanism for controlling costs and that only happens in the private sector," she said.
It would not happen overnight but even while the private sector seeks to make a profit, it would still cost less "than a Government running hospitals for no profit" and would impact on the quality of the service.
The Labour Party will be raising the issue with the Minister, its spokeswoman, Ms Liz McManus said.
The increase would be a shock to many people as "with risk equalisation all the indications were that rates were going to drop or at least stabilise, and certainly not increase", which it had been doing incrementally, she said.
Risk equalisation involves transfer payments between insurers to spread the claim costs of less healthy members among all the companies on the market.
It means all health insurers pay a share of all the claims of older, less healthy members and is aimed at discouraging companies from targeting younger, healthier people as members.
The Consumers' Association of Ireland has criticised the application and said if granted it would be an increasingly difficult burden for many of the VHI's 1.5 million subscribers.
The association's chief executive, Mr Dermot Jewell, said it had almost become a norm that there was an "annual increase" but the increase "links to so many other problems for consumers".
With increases in insurance, particularly health insurance, "the real problem is affordability" especially where there had already been so many increases, he said.
It showed the real need for reform and streamlining of the system, he added.
The Minister can veto or accept the application and under the legislation has a month to decide. There are no indications as yet that BUPA, the other health insurance company operating in the State, will increase prices. It does not have to seek Government approval for such a rise.
