Saudi Arabia National State-Funded Health Insurance By 2026

In this iPMI Global In Focus article, iPMI report author Ian Youngman, takes a look at the plans in Saudi Arabia for state funded health insurance.

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.

News

• Saudi Arabia plans to roll out comprehensive state-funded insurance cover for all citizens by 2026.
• The National Insurance programme is totally state-funded with no need for annual renewal, ensuring cover for a lifetime.
• National Insurance will not have any specific ceiling and will eliminate the requirement for prior approvals, streamlining the process for beneficiaries.
• Saudi Arabia has a public health service providing free or very low cost health care for its nationals, funded by the Ministry of Health.
• For Saudi nationals state healthcare is free with no upper limits, and funded by the government-but treatment is only in state hospitals.
• All Saudi citizens have free access to comprehensive care, including hospitals, clinics, and outpatient services. It also includes dentists, pharmacies, and rehabilitation
• The National Health Insurance Centre (NHIC) was set up in 2022 to purchase health services provided by the Health Holding Company and its subsidiaries.
• NHIC will run the state funded health insurance cover.
• All citizens who are eligible for healthcare will benefit from the NHIC's healthcare services if they are not covered by other healthcare systems, programmes or services provided to them by entities other than NHIC.
• The beneficiaries of NHIC healthcare service also include non-Saudi workers in government sectors, if they are not already covered by other schemes.
• The state oil company, police, armed forces, securities forces and National Guard will still have their own free healthcare arrangements for employees and families.
• Non-nationals have to pay for treatment in state and private hospitals.
• Expatriates are allowed to get treatment in government hospitals, provided they are ready to pay the fees.
• The state’s Council of Cooperative Health Insurance controls the compulsory health insurance system, plus all regulation of and approval of health insurers.
• CCHI will not control NHIC.
• It is currently compulsory for all private sector organisations to provide health insurance to their employees as well as their dependants - this includes spouse, unmarried daughters and male children below 25 years of age.
• All KSA employers in the private sector are required to use one health insurance policy to cover their Saudi and non-Saudi employees and their dependents.
• 46 million Saudis are covered by health insurance.
• New 2023 rules make it compulsory for households employing 4 or more domestic workers to provide health insurance.
• 99 million non-Saudis and 1.74 million dependants are covered by health insurance.

Analysis

• It may seem confusing that when free state health insurance is offered that the state expects massive future increases in private health insurance.
• But the free state care is ONLY for citizens and that will move from a non-insured to insured basis.
• Employers must buy health insurance for locals and expats but in future that need will reduce to only being for non-locals.
• While most nations have removed the need for tourists and other travellers to buy health insurance, Saudi Arabia has doubled down on compulsory health insurance.
• All holiday, business, medical and religion travellers must buy health insurance with a cap of SAR100, 000 ($26,667) in advance of travelling.
• SA expects 30 million international tourists in 2023 and a target of 70 million in 2030.
• Health insurance is provided by 23 companies but only 5 control 80% of the market.
• The top two companies, Bupa Arabia and The Company For Cooperative Insurance (Tawuniya), have 70% of the business. Their size and expertise give them a significant advantage in the market as they benefit from economies of scale.
• The main private health insurance will be IPMI as what is the point of locals buying PMI?

What Next?

• The health minister projects a five-fold growth in private health insurance in the coming years.
• Population growth, holders of premium residency, and an increasing number of tourists will drive private health insurance.
• The transformation in the health sector aims to accommodate a larger population.
• The state prediction is that the private sector’s share in providing health services will grow from 20% to 50%.
• The state is promoting to overseas investors lucrative investment opportunities in the health sector, estimating a total of SR330 billion until 2030.
• From 2024, all state healthcare services in medical cities, hospitals and primary care centres will transfer from the Ministry of Health to the Health Holding Company- that is 60% of all healthcare.
• The end result is that Saudi citizens will have free health insurance and health cover from NHIC.
• NHIC will certainly use state owned hospitals and will probably also use private hospitals.
• All non-citizens will have separate compulsory health insurance from private insurers.
• Assuming that most citizens will no longer buy private health insurance- companies face a highly competitive environment with low profit margins so there will be market exits and consolidation.