On December 31, 2014 every citizen in Kuwait became a partial owner of the Kuwait Health Assurance Company (KHAC), a new private sector provider of medical insurance. Some 1.15m shares of the company – worth around KD230m ($792.4m) in total paid-up capital – were eventually distributed among nationals by the Kuwait Clearing Company, which handles transactions and settlements for the Kuwait Stock Exchange. These shares are equal to around 50% of the firm. The remaining half of KHAC is jointly owned by a private sector consortium led by the Arabi Group (26%), a local conglomerate, and two government-controlled entities. The Kuwait Investment Authority (KIA), the state’s official investment vehicle, has a 19% stake and the Public Institute for Social Security holds 5%. KHAC will design, build and operate a full-service nationwide health care system, with services aimed initially at Kuwait’s large expatriate workforce. The new system is set to be up and running by 2018 and will act in parallel to the Ministry of Health’s (MoH) network.
DEVELOPMENT PROCESS: KHAC has been in development for more than five years. In November 2009 Ibrahim Al AbdelHadi, the undersecretary of health at the time, put forward the idea of a separate health care system for expatriates. The concept was taken up quickly, as the existing public health care system had long been strained by large numbers of foreign patients. Indeed, as of the end of 2009 non-Kuwaitis made up nearly 68% of the nation’s total population, according to data from the Public Authority for Civil Information. By the end of 2014 this figure had risen further, to just shy of 69%. Bearing in mind Kuwait’s rapid population growth – the population expanded by more than 500,000 people between 2009 and 2014 – the public health care system has become increasingly strained since the idea for KHAC was originally floated. Though the new company had yet to be formally established as of early 2015, according to a report published in February 2015 by the Kuwait Life Sciences Company (KLSC) – a wholly owned subsidiary of the state-controlled National Technology Enterprises Company – KHAC is expected to be launched in 2015.
Beginning from the date of establishment, the Arabi Group-led consortium will have three years to deliver three 250-bed hospitals, 10 primary care clinics and one surgery centre. The government, for its part, will provide KHAC with a long-term, well-priced lease on some 140,000 sq metres of land on which to develop these new facilities. The hospitals are expected to be located in the rapidly expanding governorates of Ahmadi, which is located south of central Kuwait City; Farwaniya, which is near Kuwait International Airport; and Jahra, to the east of the capital. Additionally, the state has agreed to share MoH medical records with the new entity, a move which is expected to ensure a smooth transition into the KHAC system for most expatriates.
MAKING THE SWITCH: Many details about the services provided by KHAC have yet to be announced. In a recent study on the domestic health care market published by the KIA, the government proposed a premium of KD130 ($448) per person for expatriates to access the KHAC system. This is a significant jump on the present rate of KD50 ($172), which the employers of expatriates are currently required to pay. It remains unclear what services will be covered by this premium, and whether or not expatriates will be required to sign up to KHAC. According to KLSC, enrolment in the new system will likely be optional, at least at first.
Perhaps the key question currently facing the government in relation to KHAC regards the implementation timeline for the new company. The project was launched as part of the government’s 2010-14 National Development Plan, a strategic blueprint that has since been updated in the guise of a new five-year Kuwait Development Plan. This strategy was approved by parliament in February 2015 and includes further instructions for KHAC. Provided implementation plans for the initiative move forward on time and as expected, expatriates working in Kuwait can look forward to a new health care system within 36 months.
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