The Labour Party claimed the health system is dysfunctional and broken after a second insurer announced price hikes.

Aviva is putting its rates up by 14% from next month piling further misery on hard-pressed patients following the savage increases of up to 40% by the State-owned Vhi.

Jan O'Sullivan, Labour health spokeswoman, claimed Aviva had let the Vhi off the hook.

"Coming just weeks after the Vhi premium increase, today's (Friday) news is a clear indication that the health insurance market is broken, and needs a radical overhaul," she said.

"In a functioning market, the provider that offers the lowest price would be doing everything possible to protect that competitive advantage. Instead we see today that Aviva is perfectly happy to increase premiums in line with its competitors. It is clear that something is wrong."

Aviva confirmed it was imposing a flat increase of 14% which would see its most popular adult product, used by 70% of its customers, jump from 825 euro to 941 euro. Prices go up on March 1.

An Aviva spokesman blamed a 21% increase in the cost of private beds in public hospitals and the increase in the health insurance levy.

Ms O'Sullivan added: "There is no doubt that the two-tier health system is dysfunctional. The current system is not only inequitable but it is also hugely inefficient and works neither for those who have health insurance, nor for those who do not. It is clear that a complete change is needed sooner rather than later."

The Irish Patients' Association (IPA) said the price hikes were of great concern. "We are unconvinced that this is solely to cover additional demands for private health services and medical inflation and not some marketing strategy," a spokesman said.

The IPA called for all price changes to be announced on a single day each year and claimed restrictions would stimulate competition. The group has called on the Competition Authority to probe Aviva's price increases on the back of the Vhi rise.