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Medical care costs are experiencing significant inflation. Major private insurers in the Lebanese market, contacted by This is Beirut, have indicated that their health insurance premiums will increase by about 10% starting July 1st.
The decision to raise health insurance premiums comes in a market that has been declining for several years, plagued by eroding consumer purchasing power and fierce competition, often at the expense of profit margins. To make matters worse, the National Social Security Fund (CNSS), once a flagship of the state’s social benefits management, is in a state of disarray.
Unsuccessful meeting
The increase in health insurance premiums and the CNSS’s non-payment of its dues to third-party payers were the main topics of discussion at the emergency meeting convened last Wednesday by caretaker Minister of Economy Amine Salam, who oversees private insurance companies. The meeting included representatives from the Association of Insurance Companies in Lebanon (Acal), the Lebanese Order of Physicians (LOP), and the Syndicate of Private Hospital Owners. As expected, no recommendations or concrete decisions were made following this meeting.
Cost-driven inflation
In an interview with This is Beirut, insurers explained that the increase in health insurance premiums is driven by cost inflation. They specifically highlighted the rise in doctors’ fees, which resulted from an agreement signed in May 2023 between Acal and the LOP. This agreement stipulates a gradual increase in doctors’ fees until May 2024. As a result, fees that previously ranged from $35 to $45 now fluctuate between $70 and $100.
They also discussed the significant reduction in state subsidies for medical care and medications, which has left private insurers to cover the full financial burden. For instance, each chemotherapy session for cancer patients now costs between $5,000 and $7,000, while certain injections can cost nearly $22,000.
Additionally, insurers criticized importers of medical equipment and prosthetics, urging them to stabilize their prices to help align insurance premiums.
Caretaker Minister of Economy Amine Salam also criticized the excessive profit margins of some medical equipment importers, which he said range from 50% to 70%. “These profits ultimately appear in hospital bills, patient invoices, and, eventually, insurance costs,” he remarked.
Rationalizing medical procedures
Interviewed insurers criticized the excessive medical tests and prolonged hospital stays prescribed by hospitals and treating physicians.
A Franco-Lebanese doctor practicing in Beirut and southern France, who wished to remain anonymous, suggested that the state should implement a health policy to rationalize medical procedures without standardizing them. However, he acknowledged the challenge of balancing effectiveness and efficiency.
Inflation rate of 23%
An actuarial study cited by several insurers revealed a 23% inflation rate in the costs of medical procedures and care from 2023 to 2024, excluding medical abuses. Therefore, the 10% increase in health insurance premiums is still below the actual inflation rate, according to industry professionals.
While insurers justify this increase, it places a significant burden on families, straining their budgets. According to the Ministry of Economy, 500,000 Lebanese and non-Lebanese residents hold private health insurance policies.