The General Authority for Competition reviewed the competitive assessment of the health insurance market in the Kingdom, and highlighted its concerns about the levels of competition in it.
The authority clarified, during a study entitled “Study of health insurance and the impact of establishments operating in it on competition”, that the level of concentration in the market is high, as the market share of the three largest companies reached 83% of the market, which constitutes concerns about competition.
She pointed out that private health insurance covers 30% of the working population, stressing that there has been a significant expansion in the health insurance sector recently, especially after imposing mandatory health insurance for private sector workers and their companions.
On the prices of health insurance policies or products, the authority concluded that they depend on several factors, including the entitlements and characteristics of the main insurance policy, the strategy of insurance companies issuing insurance and the internal cost structure.
Regarding the pricing of health care services, the authority stressed that it is the result of individual contractual negotiations between health insurance companies and health care service providers, with little regulatory supervision and controls in the price negotiation process, as there is no unified approach to cost estimation.
She added that the actual price of health care services provided differs from the prices approved by the Ministry of Health for health care providers, due to the discounts obtained by some health insurance companies, which may total up to 50% or 60% in certain cases.
The study stated that the concentration in the health insurance market is high, and that companies did not record any income in the past years, which indicates that the current competition may be subject to market shocks, especially since the number of major participants is limited, which may turn the market into monopolistic competition, which may It leads to higher prices and less innovation.
It also indicates that the current competition is fragile, which may act as a magnet for market participants to replace the current equilibrium of competition with explicit or tacit collusion, which may lead to higher prices.