Following the approval by the European Commission of Ireland’s health insurance levy it is feared that premiums will become more expensive.

Reports claimed that costs of policies are already jumping up as families are warned they will pay over €400 more per year in premiums.

A go-ahead was yesterday given the government to introduce the controversial scheme aimed at making cover more affordable to elderly customers.

Under the plan the government will provide more tax relief for private medical insurance for all persons aged 50 years or more.

But it will become more costly for others as the government introduces a levy of €160 a year on all health insurance firms for each adult and €53 for each child on their books.

The cost will then be passed on to customers.

One insurer, Hibernian Aviva, has already warned that a family of two adults and two children on its book will end up paying an extra of €426 a year as a result of the decision.