Jordan Health Insurance Expansion Halted as State Runs Out of Money

In this iPMI Global Country Guides Insights article, iPMI report author Ian Youngman, takes a look at the news that Jordan has halted its health insurance expansion because the state has run out of money.

Ian Youngman is a writer and researcher specialising in insurance. He writes regularly for a variety of magazines, newsletters, and on-line services. He publishes a range of market reports, and undertakes research for companies. To read his latest report, International Health Insurance 2023, please click here, or visit the REPORTS section of iPMI Global.

SSC also argues that the proposed scheme in its current format is marred by many gaps, including that medical treatment to be claimable under the scheme will only be provided by hospitals, and this is not acceptable - “Health insurance usually starts with primary healthcare, which begins outside the hospital.”

• The majority of the Jordanian population is covered by social health protection.
• The Jordanian government, through the SSC, had proposed healthcare benefits for private-sector workers, pensioners and their families who are already under the scope of SSC coverage with a focus on inpatient care and cancer treatment.
• Currently, a third of the population in Jordan is not covered by health insurance.
• The proposed extension of social health insurance to the private sector will be postponed until further notice, due to financial concerns, as the Social Security Corporation (SSC), does not have enough money.
• SSC needs an appropriate financial reserve to enable the SSC to respond to any sudden changes in healthcare costs due to epidemics, general accidents, sudden high rates of inflation and unemployment, and others.
• Budgeting and planning regarding future insurance revenues and expenditures must be made to ensure the adequacy of revenues generated from subscriptions and other sources to ensure that they are sufficient to cover healthcare and administrative expenses in the medium and long term, to ensure a surplus in the health insurance fund.
• The comprehensiveness, efficiency and fairness of the proposed scheme for the insured, beneficiaries and their families must be fair and balanced.
• The SSC argues that the insurance proposal contains strategic errors and relies on deducting 6% of the wages of the insurance participants without the participation of the employer and the government.
• This mechanism, in light of the current economic conditions, is difficult for the citizen to bear alone.
• SSC argues= “The basic principle of health insurance is that it is based on three pillars: the worker, the employer, and the government. So, if the interests of the three parties meet in providing health insurance and financing the bill for this insurance, it will succeed, but charging the bill for this insurance to one party but not other parties involves a kind of risk.”
• There is no date on when the proposed social health insurance scheme would be revived.

Analysis

• Jordan’s plans on healthcare, health insurance and insurance regulation are a mess.
• The International Monetary Fund (IMF) has just suggested that the Jordanian government can consider enhancing healthcare revenues by modifying insurance premiums and cost-sharing.
• They also called for a strategy to be developed for good, affordable, and sustainable healthcare in the Kingdom.
• A new IMF report In a new report titled “Health Spending Efficiency: Issues and Reform Directions”, the IMF pointed out medium-term pressures on healthcare spending in Jordan are caused by rising healthcare costs and coverage of expenses for elderly citizens with chronic diseases, in addition to providing subsidised healthcare for 1.3 million Syrian refugees
  It confirmed that Jordan has strong health outcomes in several health indicators, however, the Jordanian healthcare system is under pressure due to rising healthcare costs. Jordan tends to focus its budget on hospitals and drugs and less on primary healthcare.
  Jordan aims to achieve “universal health coverage” by 2030.
• 2 million people in Jordan have no public or private health insurance.
• Jordan’s economy had been struggling with persistently sluggish growth dynamics and structural challenges.
• The economy is dominated by the state sector.
• Unlike other Arab states there is no thought of making health insurance compulsory for expats.
• Very few locals have private health insurance.
• This provides a gap that PMI and IPMI insurers can fill.
• But the lack of clarity on regulation will make many companies wary.
• The main problem for Jordan in making employers pay is that in most case it is the employer.

What Next?

• The Ministry of Health 2023–2025 national strategy is based on creating an integrated health system that enhances the health of individuals and society and provides preventive, curative, rehabilitative, and safe health services with fairness, quality and efficiency.
• The Health Ministry has a plan to reform the health sector that includes the establishment of an independent health insurance body.
• The plan has seven major aspects, including primary healthcare, secondary healthcare, health insurance, pharmaceuticals, medical tourism, reliability, quality control and e-health.
• The health insurance aspect of the plan entails projects and initiatives including restructuring existing health insurance formats to increase their efficiency and creating an independent health insurance body that would serve as an umbrella for health insurance funds.
• The Insurance Commission of Jordan used to regulate insurance companies but was scrapped.
• Various regulators and ministries are vying for control of a new insurance regulator.
• A draft law is at present before legislators.
• The Jordanian government is considering establishing an independent body to oversee health insurance, in line with the Ministry of Health's executive plan for the reform of the health sector for 2018-2022.
• Jordan aims to achieve universal health coverage by 2030 but struggles to pay for it.
• The state, doctors and insurers are looking at ways to make insurance affordable for state and employees.