The Taoiseach has admitted that around 50% of private health insurance policies will be hit by changes to tax relief. That is despite the Finance Minister insisting in his budget speech that only "gold-plated" policies would be hit.

Enda Kenny says everybody can achieve tax relief on a basic policy, and if they can afford a more expensive one then that option is there.

The Revenue Commissioners say that over 550,000 policy holders will have an higher income tax bill as a result of changes announced last week.

But the Taoiseach says the changes will not affect people with an average health insurance policy.

Last week it was estimated that nearly 1.4 million people could be hit with a €100 increase in their health insurance plans on the back of the cap to be introduced on premiums.

The Chief Executive of Insurance Ireland, Kevin Thompson, said he supports the government plans to get the economy back on track - but that the adjustment to tax relief on insurance "doesn't make sense".

He says it will affect almost all Irish policy holders.

"When you consider that the average adult health insurance premium is €1,500 per annum per adult, and tax relief now has been capped at €100 - that equates to an extra €100 per annum per adult premium" he said.

"Generally we have two million people covered by health insurance within the State, 1.4 million of those are adults - of which 90% of these will be affected i.e. 1.2 million adults" he added.