Health Insurance

1. HEALTH INSURANCE INDUSTRY
MARKET STRUCTURE:
COVERAGE AND COST ISSUES
Nada A.Alsubki
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Jenner, B. C. (2010). Health Insurance Industry Market Structure: Coverage and Cost Issues. Nova Science Publishers, Inc

2. The Book Aims To:
Discuss how the current health insurance market structure affects the
two policy goals of expanding health insurance coverage and containing
health care costs.

3. Content
The Market Structure of the Health Insurance
Industry
Health Insurance: A Primer.
Health Insurance Market in KSA.
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4. Introduction
 Health insurance markets are linked to wider concerns about the cost,
quality, and availability of health care.
 The market structure of the health insurance and hospital industries may
have contributed to rising health care costs and deteriorating access to
affordable health insurance and health care.
 Many features of the health insurance market, and the ways it links to other
parts of the health care system, can hinder competition, leading to
concentrated markets, and producing inefficient outcomes.
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5. The Market Structure of the Health Insurance
Industry
 Health insurance is intertwined with the whole health care system.
 Health costs appear to have increased over time, in large partly because of
complex interactions among health insurers, health care providers,
employers, pharmaceutical manufacturers, tax policy, and the medical
technology industry. Reducing the growth trajectory of health care costs
may require policies that affect these interactions.
 The market structure of the health insurance is important because it reflects
the Health Care industry market.
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6. How the health insurance industry developed
 All the health care systems aim to ease access to health services and
improve the quality and efficiency of health care services through different
plans and techniques.
 Health insurance is one of the major components in any health care
system. By ensuring adequate health care coverage with financial
sustainability aims to improve sustainability and financial transparency.
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7. DESCRIPTION OF THE HEALTH INSURANCE MARKET
 Health insurance is a method of pooling risks so that the financial burden of
medical care is distributed among many people.
 The health insurance market is tightly interrelated with other parts of the
health care system. Consequently, many parties play a role in the health
insurance market.
 Demand for health insurance, according to economic theory, depends on a
person‘s attitudes towards risk, the variability of medical expenses, the
effectiveness of health care covered by insurance, income, and the level of
premiums.
 In a simplified case, an insurance policy is characterized by the premiums
charged, medical services covered, and cost sharing.
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 The insurance premium equals the expected benefits the insurance company
will pay out, which equals the average price of medical care multiplied by the
average quantity of medical care provided, plus a loading fee to cover
administrative expenses and profits.
 The loading fee acts as a price of insurance: other things equal, higher
loading fees reduce demand for insurance coverage.
 The basic tasks of insurers are to bear risks, which are pooled to reduce
overall risks, and to administer plans, by paying claims, providing customer
support, and negotiating with providers .

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 The average price of medical care may depend on the complexity of
services, the relative bargaining power of providers and insurers, and the
cost structure of the providers.
 The average quantity depends on consumers‘ demand for health care,
providers‘ willingness to supply care at prevailing prices, and managed care
controls of the insurer.
 The size of the load factor depends on the insurers‘ administrative costs,
costs of capital, and the ability of insurers to pass along higher premiums to
employers and consumers.
 The employer-sponsored health insurance type is usually the source of
health insurance coverage.

10. Types Of Health Plans
Types Of Insurance
Companies
Risk-Sharing
Administration
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Factors
affect
Health
Insurance
system
Role Of Employers
Health Care System
Framework
Health Insurance
Regulation

11. HEALTH INSURANCE: A PRIMER
 Health insurance provides protection against the possibility of financial loss due
to high health care expenses.
 The government both initiates and responds to dynamics in medicine, the
economy, and the workplace through legislation and public policies.
 Legislation aimed at modifying or building on the current health insurance
system, understanding the potential impact of such proposals requires a working
knowledge of how health insurance is designed, provided, purchased, and
regulated.
 Health insurance benefits are delivered and financed under different systems.
The factors that distinguish one delivery system from another are many,
including how health care is financed, how much access to providers and
services is controlled, and how much authority the enrollee has to design her/his
health plan.
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The concept of health insurance
 The methods employed by an
insurer differ from those of a
consumer, each has the same
goal: to minimize risk in an
uncertain future. It is this
uncertainty of the future and
risk of financial loss which
form the context for
insurance, and the strategies
to make financial loss more
predictable and manageable
which drive insurance
arrangements.
Insurance Policy
 A contract between the insured and the
beneficiary, whereby the beneficiary pays
the insured premiums in return if he
suffers a health damage, which makes
the insured bear the costs and expenses
of treatment. The insurance policy
consists of three main components:
insurance premiums, the maximum
policy limit, and the amount that may be
deducted. It also includes the insurance
price (risk price / risk burden), insurance
amount (risk amount), insurance period
(annual renewal)

13. Why Health Insurance?
 Supporting healthcare in the private sector.
 Reducing the burden on government hospitals.
 Providing a financing channel for the health sector.
 Ensuring that hospitals operate on an economical basis.
 Consolidating the spirit of cooperation and solidarity among the groups of
society.
 Developing programs for investment in the health sector.
 Transferring the burden of healthcare cost from government to society.
 Improving the quality of health services.
 Monitoring the health system.
 Utilization of resources.
 Equity in providing health services to those in need.
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14. Health Insurance Regulation
 Health insurance regulation addresses a wide variety of issues: the
benefits that must be offered, the individuals to whom the insurance
is made available, and the responsibilities insurers must plan
enrollees, to name a few.
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15. Health Insurance Market in KSA
 The Saudi Arabia health insurance market was worth US$ 5.68 Billion in
2019. Health insurance is a type of insurance coverage that periodically
charges a sum from the policyholder and pays for medical and surgical
expenses incurred by the individual in case of a medical emergency.
 The increasing population and diversification of the nation’s economy are
among the key factors driving the Saudi Arabia health insurance market.
 Health insurance in Saudi Arabia is oriented towards easing the financial
stress that comes with having to pay exorbitant medical bills due to
unexpected illness or injury.
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Rahman, R., & Al-Borie, H. M. (2020). Strengthening the Saudi arabian healthcare system: role of vision 2030. International Journal of Healthcare
Management, 1-9.

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 Additionally, the Saudi Arabian government mandates health coverage for all
nationals and non-nationals. The country began implementing the mandatory
unified health insurance scheme in July 2016, with the system completely in
place since 2017. It is compulsory for all private sector organizations to
provide health insurance to their employees as well as their dependents.
Furthermore, factors such as rising population, increasing healthcare
expenditures, growing prevalence of various lifestyle diseases, improving
healthcare infrastructure, etc. are also catalyzing the growth of the health
insurance market in Saudi Arabia.

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Health
Insurance
System
Component
Legislator
Payer
Provider
Customer
Need
SAMA,CCHI,SHC,
MOH
PHAP, Insurance
company
Hospital, Health
Care
Institution,CBAHI
The Health Insurance System Component

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Health
care
System
Component
Provider
Internal
Parts
External
Parts
Customer
Need
MOH, other
governmental
institution ,
private sector
The Health Care System in SA

19. The Health Insurance Structure In KSA
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All
Sectors
Public
Private
Nonprofit
Health Insurance System
Provider And Supplier
Universal
Health
Insurance
coverage
SRCA CCHI
NAZAHA
GDP
HRSD
SHC
CBAHI
SAMA
GOSI
SFDA
SCFHS
MOH
(PHAP)
MOFA MOJ
MCI

20. THANK YOU