Health insurance customers are facing massive premium hikes in 2013 because of a new scheme spearheaded by James Reilly.
The health minister is to allow hospitals to charge insurance firms every time their customers use public beds -- a move that will see premiums rise by almost 50pc.
The plan means all insurance customers who spend a period in hospital will be hit with charges -- whether they stay in a private bed or not.
The increases will come at the worst possible time for hard-pressed families, who are already dealing with the effects of December's Budget.
The Department of Health has confirmed that the new scheme is tied in with Budget 2013 -- as Dr Reilly desperately tries to deal with the overrun in spending.
As a result of the scheme, public hospitals will charge insurers every time their customers use State-owned beds.
The move will especially hit insurers, as they will not be allowed to negotiate the price of a public bed.
Experts say this will prompt insurers such as VHI, Aviva and Laya Healthcare to ramp up premiums by up to 50pc.
The State-owned VHI has already indicated that the scheme will see its customers face premium hikes of up to 45pc. Firms are currently charged €75 a day when their customers avail of a public bed and over €1,000 a day for the use of a private bed.
It's now likely some insurance companies will carry out a redesign of their policies.
Dermot Goode, of www. healthinsurancesavings.ie said that Dr Reilly's scheme "will definitely lead to higher premiums".
"Given that the public hospitals will now be able to charge around €1,000 per night instead of €75 per night for these beds, the impact will be significant. There is no doubt that this will be passed on," he added.
A spokesperson for the Department of Health confirmed that Budget 2013 has already made provision for the income expected to be generated by Dr Reilly's scheme.
The news that more premium hikes are on the way come at the end of a brutal year for health insurance customers who were hit by a series of punishing increases.
Around 2.1 million customers have seen the cost of their health insurance increase by 20pc over the past year.
Some 54,000 customers dropped their private cover in the first nine months of 2012 -- on the back of the 66,000 who abandoned policies in 2011.