The Ministry of Health's decision to suspend a health insurance scheme for retired citizens and housewives has raised questions about whether the insurance programme, when resumed, would be offered collectively by a group of insurers or awarded to an insurer through a tender.
Earlier this month, the Kuwaiti Cabinet approved the temporary suspension of the Afya health insurance scheme for retired citizens for one year with effect from 12 September. This was days short of the 15 September expiry of the then-prevailing contract with GIG.
In a statement, the ministry explained that the insurer refused to commit to the “same previous conditions and prices without an increase”.
On its part, GIG said that it had informed the Health Ministry of its willingness to extend the contract by six months, despite bearing a higher financial burden as a result of adding housewives to the coverage. This was despite the Health Ministry directing that an allocation of KWD33.76m ($110.7m) be made for the period 1 January to 15 September 2024 to cover the cost of including housewives as Afya beneficiaries.
Following the termination of the contract, GIG said that it would extend coverage to retirees who began treatment at a private hospital in Kuwait before the termination date and would continue to do so until their discharge from the hospital.
Afya was initiated by a law published in 2014 to provide health services to retired Kuwaiti citizens at private clinics and hospitals, covered by the government. The government approved housewives as Afya beneficiaries last year.
Ripples in insurance market
Sources told the newspaper Al-Rai that the suspension of Afya had created ripples in the insurance sector, giving rise to hopes of vying for the service contract again. At least two big insurance companies are ready to compete in a tender exercise while the majority of insurance companies prefer to offer coverage through an insurance pool.
It is worth noting that 34 insurance companies operate in the local market, including 20 Kuwaiti companies, 13 foreign companies, and one reinsurance company.
Impact of suspension
First Takaful Insurance CEO and vice chairman Hussein Al-Attal called on the Ministry of Health to find a satisfactory solution to renew the contract. He also said that if no agreement was reached with the current insurer, the government should launch a tender with new terms to be presented exclusively to Kuwaiti insurance companies listed on the Kuwait Stock Exchange, so that retired citizens and housewives are not affected by the suspension of the coverage. He said that the suspension might affect a large segment of citizens, numbering about 200,000, including retirees and housewives.
He explained that the hospital sector witnessed a significant economic recovery from the revenue received from the Afya scheme. There are more than 400 service providers, including hospitals, medical centres, clinics, or pharmacies, affiliated with the private health sector, that provide medical services to the segments benefiting from Afya.
Wethaq Takaful Insurance Company chairman Nasser Enad Faisal Al-Enezi said that the termination of the Afya contract would increase pressure on public medical services, in addition to higher demand for medical treatment abroad.