About 15,300 people with serious health conditions can expect to go back on to free healthcare under the discretionary medical card scheme, the Government has announced.
Anyone who had a discretionary card or GP visit card taken from them following an eligibility review from July 2011 to May this year will be re-examined by health bosses without having to reapply to get back in the system.
As part of the U-turn, the Government said it accepts that the initial review of some seriously ill people produced "unintended consequences".
"Much anecdotal evidence points to the fact that some persons with an acute medical condition, or a lifelong condition (including a disability) have lost their medical cards, an outcome that the Government could not stand over," the Department of Health said in a statement.
It said the new review will take account of people's health, acute and lifelong conditions, disability, as well as financial means.
Health Minister Dr James Reilly apologised for patients who need frequent treatment being taken out of the free healthcare system.
"This was an unintended consequence for which I am sorry," he said.
Agreement on reviewing cancelled discretionary and GP cards was ordered following intense criticism of Dr Reilly's handling of cost-cutting in the free healthcare arena.
The Department of Health said that it has been arranged on advice from the Attorney General and the opinion of Tony O'Brien, director general of the Health Service Executive (HSE), who said he is satisfied that it will allow health chiefs to return cards to people with an acute medical condition or a with a lifelong condition, including disability.
It also said the review was part of the wider reform to bring in universal health insurance ensuring cover for everyone based on community rating to keep premiums at the same level for all regardless of how great their medical need is. The Government will subsidise the cost of premiums on the basis of ability to pay.
To be eligible for the review, people must have held a medical or GP visit card issued on a discretionary basis but had it withdrawn after completing an eligibility review; and they must have a serious medical condition which required that their case was referred to a medical officer as a part of the review process.
The Government has set aside 13 million euro (£10.4 million) to cover the cost of returning the medical cards.
The HSE said it should take three weeks to have free healthcare and GP visits reinstated for people.
Mr O'Brien said: "In light of today's decision by Government, the HSE has greater freedom to exercise its powers and to observe its obligations under the 1970 Health Act and is returning these cards on a temporary basis, pending further policy decisions by Government, expected in the autumn.
"Further policy changes may change the basis on which eligibility for health services is to be determined in the future."
The HSE said 5,288 medical cards will be restored and 2,899 GP visit cards will be returned and 7,118 people will move from a GP visit card to a medical card.
Roisin Shortall, a former junior health minister who resigned over a row with Dr Reilly about primary care centres, welcomed the move in part but queried the assessment that 15,300 will be back on free care.
"It's a U-turn that is to be welcomed insofar as many people have been treated disgracefully by the Government," she said.
Ms Shortall said she had concerns that 30,000 people have had discretionary medical cards removed and that the Government may not be open to compensation claims over the debacle.
The HSE later clarified that the 30,000 figure also included people who did not complete reviews and were excluded from the scheme, people who had died and a range of other issues.
Dr Reilly also confirmed that patients and families who had cards taken from them will not be in line for compensation or a refund of medical expenses incurred.
He said that health chiefs had clear advice that all decisions made on medical cards were made on a legal basis.
Elsewhere, an exception will be made to the current review allowing people who did not complete the initial assessment because of special circumstances to be allowed to reapply for a medical card.
Sinn Fein health spokesman Caoimhghin O Caolain said: "The effective removal of discretion as a category of medical card has had a devastating impact on many families, especially those with seriously ill or disabled children.
"That the Government has finally yielded is welcome, if long overdue. We await to see the precise outworking of this decision.
"The Government must ensure that the HSE treats with due respect, consideration and compassion, all applicants for medical cards, taking fully into consideration not only incomes but the burdens imposed by medical conditions, illnesses and disabilities. It should extend free general practitioner care to all on a programmed, timetabled and transparent basis."