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The decision by the VHI to reduce the level of cover offered for certain treatments in private hospitals has been criticised by consumer groups.

From the beginning of next month, the State’s largest health insurer will no longer provide people in its popular parent and child schemes with full cover for some orthopaedic and ophthalmic procedures including knee and hip replacements and cataract operations if they are carried out in a private hospital.

Instead, people will only be entitled to 80 per cent cover. The changes will only take affect from a policy holder’s renewal date.

The Consumer Association of Ireland (CAI) questioned the legality of the move and said the Health Insurance Authority (HIA) needed to examine the VHI’s move very closely.

“Without a doubt, the VHI has made a mistake here,” the association's chief executive Dermott Jewell said. “Every single member has a contract with the VHI and if that contract is going to be significantly changed then it is not enough to refer people to the small print or ask them to check a table of cover.”

He said the downgrading of the cover was “completely unacceptable and we in the CAI would stress the HIA needs to note the seriousness of the matter.”

He expressed concern that people on the family plans who had certain pre-existing conditions which will no longer be comprehensively covered in private hospitals from their next renewal date would have to wait for a period before those conditions were covered should they decide to upgrade their policy.

“The very idea that the VHI would look at such situations on a case-by-case basis is shocking. This will have significant affect on the confidence many people have in the VHI,” he said.

A VHI spokeswoman insisted to The Irish Times that its customers had been properly informed of the policy changes.