The insurance industry has repeatedly and publicly highlighted the need for immediate and substantive measures to rationalize healthcare costs, yet no progress has been made to date.
When public debate focuses solely on insurance companies without taking into account all the factors that shape insurance costs, it is impossible to find a meaningful solution to the problem, according to a statement from the Hellenic Association of Insurance Companies.
1. Why are insurance premiums adjusted?
• Insurance companies do not generate or determine healthcare costs themselves. They cover them. They pay for the cost of care their policyholders receive from private healthcare providers, such as clinics and doctors, through the premiums they collect.
• Insurance companies operate under the strict European Solvency II framework, which requires them to always have sufficient capital to cover their obligations to policyholders. When the cost of claims rises, companies need to adjust premiums. Otherwise, they are required to inject additional capital of their own to continue meeting Solvency II requirements.
• If increases were consistently capped at 7% per year, as was the case in 2025, significant capital requirements would arise to ensure compliance with Solvency II, estimated to exceed €5 billion. This amount corresponds to more than double the total equity currently held by the Greek insurance market across all sectors (€4.1 billion).
• Each insurance company responsibly sets its pricing policy in accordance with the technical and financial needs of its portfolio, while ensuring its sustainability, as required by the strict supervisory and financial framework governing the sector (Solvency), while also informing its policyholders about the factors affecting the adjustments.
2. Why the cost of health coverage is rising
• In recent years, there has been a significant increase in the cost of healthcare services:
- In 2024, insurance companies’ claims payments increased by approximately €150 million compared to 2023, or 21%.
- The average annual increase in total health insurance payouts for the period 2020–2024 stands at 10.8%, while specifically for the period 2022–2024, this rate surged to 18.9%.
• The rising cost of healthcare coverage is a global challenge, resulting from an aging population, inflationary pressures, and the continuous advancement of medical science.
• In particular, the integration of new medical technologies, innovative therapies, and advanced diagnostic methods—which significantly improve patient outcomes—also entails particularly high costs.
• In Greece, this pressure is more intense due to specific characteristics of the healthcare market. The high degree of concentration among private providers, particularly in hospital services, combined with the absence of a unified and transparent pricing system, exacerbates upward cost pressures.
• Private hospital services in Greece are among the most expensive in Europe, with certain medical procedures reaching cost levels comparable even to those in the United States, while also being subject to a 24% VAT.
It should be noted that the Greek insurance market pays out approximately €1 billion annually in claims for healthcare services. About 20% of these claims correspond to taxes and other charges payable to the State.
3. The insurance market’s proposals for cost containment
- the horizontal application, in both the public and private sectors and for all payers, of transparent and internationally recognized hospital reimbursement systems (DRGs),
- the expansion of the licensing and operation of Autonomous Day Care Units in the metropolitan areas of Athens and Thessaloniki, just as in the rest of the country, for the performance of minor and moderate surgeries
- a review of the 24% VAT rate on private healthcare services,
- Extending the exemption of health insurance premiums from the 15% insurance tax to all age groups, or at least to those over 65 years of age.
- Public-Private Partnerships (PPPs) through collaboration between insurance companies and public hospitals for the benefit of citizens, policyholders, and state revenues.
Private insurance covers the healthcare needs of hundreds of thousands of citizens in private facilities through health insurance policies, thereby substantially contributing to the relief of pressure on the National Health System (ESY) and absorbing healthcare costs to the benefit of the state budget, effectively helping to ensure the sustainability of the public system, the relevant briefing concludes.