Concerns are being expressed about the government plan to make people aged over-35 pay more for health insurance when they take it out for the first time.

A 2% penalty will be added to premiums for each year over that age in an effort to get younger people back into the market.

The last six years have seen over 250,000 people drop their health insurance policy.

The measure is being billed as an effort to encourage more young people to take out health insurance. However a discount will apply to those who take out policies between the ages of 21 and 25.

The Health Minister James Reilly has said the plan should halt the massive increases in insurance costs that we have seen in recent years.

First-time policy holders aged 35 will have to pay an extra €20 a year, those aged 50 will pay an extra €320, and if you join at aged 69 or over it will cost you €700 extra per year.

Health economist Ray Kinsella says people will have an incentive to join early, and it will also encourage those considering giving up their insurance to keep it on.

However he told Newstalk Breakfast that he thinks it will not address one serious point.