Greece: Health Insurance Premium Crisis

Greek health insurance premiums will allegedly increase by 14% in 2025, affecting approximately 1.2 million private health insurance policyholders and prompting significant government intervention. Insurance companies justify the hikes, citing rising healthcare costs and a loss ratio exceeding 100%, but the opposition party, PASOK, criticizes this as unfair and lacks transparency. The government is responding by replacing the current premium index with a new  one and investigating potential anti-competitive practices within the insurance industry, aiming to mitigate the impact on citizens. Several policy changes are also being considered to improve the situation.

Health Insurance Premiums in Greece: A Contentious Debate

Main Themes:

Rising Premiums and Affordability: Private health insurance companies in Greece are planning to increase premiums by up to 14% in 2025, affecting approximately 1.2 million policyholders. This has raised concerns about affordability and access to healthcare for many citizens.

Transparency and Justification for Increases: The Hellenic Association of Insurance Companies (EAEE) argues that premium increases are driven by rising healthcare costs and high payouts, citing the unified health index compiled by the Foundation for Economic and Industrial Research (IOBE) as justification. However, critics, including the political party PASOK, challenge the transparency of this index and accuse insurance companies of setting their own rules and creating an environment of "unaccountability."

Government Intervention and Proposed Solutions: In response to public outcry, the government has pledged to intervene. The Development Minister announced several measures, including:

• Replacing the current IOBE index with a new index from the Hellenic Statistical Authority (ELSTAT) starting in 2026.
• Urging insurance companies to limit increases for 2025 and emphasizing the government's commitment to reducing the cost of living.
• Requesting an expedited investigation into the insurance industry by the Competition Commission.

Debate on the Role of Private Healthcare: The EAEE suggests that the government could promote competition in the health sector by simplifying the framework for creating new private hospitals, generalizing diagnostic-related groups in the private sector, and reviewing the VAT rate on private health services. This highlights the ongoing debate on the balance between public and private healthcare in Greece.

Further Research:

• A deeper analysis of the methodologies used by the IOBE and ELSTAT indices would provide further insights into the justification for premium increases.
• Investigating the impact of the 2020 law on the health insurance market and its contribution to the current situation is crucial.
• Research into the potential effects of the government's proposed solutions, such as the new ELSTAT index and increased competition in the private healthcare sector, would be beneficial.

Greek Health Insurance Premiums FAQ

1. Why are health insurance premiums in Greece increasing?

Health insurance premiums are rising due to the increasing cost of medical services and high annual payouts by insurance companies. The Hellenic Association of Insurance Companies (EAEE) argues that they are merely covering the rising costs of care provided by private health providers. They also cite the rising IOBE health index, which tracks healthcare costs.

2. What is the government doing about the rising premiums?

The government, facing pressure from opposition parties like PASOK, plans to intervene in the market. Development Minister Takis Theodorikakos announced that a new index from the Hellenic Statistical Authority (ELSTAT) will replace the current IOBE index, effective January 1, 2026. The government has also deemed increases of up to 14% for 2025 unacceptable and urged insurance companies to reconsider.

3. How have insurance companies defended the premium increases?

The EAEE argues that insurance companies do not set healthcare costs but rather pay for them through the premiums they collect. They claim that the health sector remains unprofitable for insurance companies, with payouts and expenses exceeding collected premiums. They cite a loss ratio of 112.9%, indicating they pay out more than they receive.

4. What is PASOK's position on the premium increases?

PASOK leader Nikos Androulakis criticized the government for a 2020 law that allowed insurers to set their own premium rules, arguing that it allowed companies to price out long-time policyholders. He plans to introduce an initiative in Parliament to address the "exorbitant increases" and restore fairness and transparency to the sector.

5. What is the impact of the rising premiums on policyholders?

The rising premiums are affecting approximately 1.2 million private health insurance policyholders. Many are being priced out of their plans, particularly those with lifelong policies which have seen substantial premium hikes in recent years. This is forcing many to abandon their health insurance coverage altogether.

6. What are some proposed solutions to address the rising cost of healthcare?

The EAEE suggests promoting competition in the health sector by simplifying the framework for the creation of new private hospitals and attracting investments. They also propose generalizing diagnostic-related groups in the private sector, reviewing the 24% VAT on private health services, and extending the exemption of health insurance premiums from the 14% tax to all ages.

7. What is the role of the Competition Commission in this issue?

The government plans to request that the Competition Commission expedite its investigation into the insurance industry. This investigation aims to examine whether there are any anti-competitive practices contributing to the rising premiums and to ensure a fair and competitive market.

8. What is the long-term goal of the government's intervention?

The government aims to reduce the cost of living and support all citizens by ensuring access to affordable and quality healthcare. They hope that by addressing the rising health insurance premiums, they can alleviate financial burdens on policyholders and ensure a sustainable healthcare system.

iPMI Global CEO Christopher Knight comments, “The debate over rising health insurance premiums in Greece underscores the complex interplay between rising healthcare costs, affordability for citizens, the role of private healthcare, and government regulation. While the EAEE emphasizes the need to cover rising costs, critics argue for greater transparency and affordability. The government's proposed interventions aim to strike a balance between these competing interests.”