The chapter is focused on the study of the effect of the processes caused by the global COVID-19 pandemic on the health insurance market in Bulgaria – a field of business with a high return on investment and an exceptional public benefit, while at the same time suffering from a deficit of research, which necessitates the need for more in-depth and up-to-date scientific analysis and studies. In this regard, referring to the official statistical data of the Financial Supervision Commission, an analysis is made of the key indicators for the development of the insurance market in Bulgaria during the period 2017-2022, indicating the factors that influence the main processes taking place in it. The main result is expressed in confirmation of the thesis, that there is high market concentration in the current health insurance market, in favor of a few insurance companies performing a key role in it, and on the market, there is growth in terms of gross written premium income, also provoked by COVID-19.
Top1. Introduction
The health insurance market as we see it today is the result of several processes, but three of them are particularly important: the process of relicensing social health insurance companies; the attempt to involve insurance companies as an active party within the social health insurance model operating in Bulgaria and the COVID-19 pandemic. These processes can be defined as key “catalysts” for health insurance market development.
The first of them is the process of relicensing social health insurance companies as insurance companies (formed public relations in this sphere by the legislative power and as a new stage of the ongoing health reform in Bulgaria, assigning their role to the second pillar of the current social health insurance model), which started in 2012. This major change, which occurred by the requirements of Council Directive 73/239/EEC15 and Council Directive 92/49/EEC16 and amending Directives 73/239/EEC and 88/357/EEC17, aimed at (Ministry of Health (Bulgaria); Ninova, 2021; Ninova, 2016):
− unification of Bulgarian and European legislation expressed in actions to eliminate inconsistencies in the regulatory framework of the activity on supplementary social health insurance;
− strengthening financial supervision over social health insurance companies; elimination of the insufficiency and limitation of the information included in the program of their activity, as a result of which it is impossible to assess its reliability, its adequacy, and feasibility; increased companies’ capital and solvency requirements, caused by the specifics of the activity related to the health of individuals;
− increasing the quality and security of the offered services. According to the provisions of the Insurance Code, the criteria for insurance companies are higher, which automatically guarantees the users of insurance services that the companies admitted to the market are financially stable, responsible, and apply good business practices;
− strengthening competition in the sector, through a more diverse portfolio of innovative health insurance products and services, and hence the provision of greater options for choosing the same on the part of the users – corporate clients and citizens.
After calming down the relationships that arose among the various entities brought about by this reform, the activity of insurance companies offering health insurance policies in the form of additional health protection (voluntary health insurance) was channelized, and their efforts were directed towards capturing a larger market share. The offered aid, materialized in an insurance product offering a package of medical care, supplementing the basic package of medical assistance provided under the public compulsory social health insurance in Bulgaria, administered by the National Health Insurance Fund (NHIF), has provoked great interest between the business environment and citizens. The logical explanation for the stated interest lies, on the one hand, in the emerging trends of ever greater demand and attention to this type of need, subject to the prioritization and increased demands of individuals for their health, and from the business point of view – for the health of employed associates (employees and workers). On the other hand, the constant interest of the citizens is dictated by the desire to reduce to the maximum extent the existing systemic obstacles to accessing receiving timely, quality, and effective health care, which is also considered one of the serious shortcomings of the current Bulgarian healthcare system. On the third hand, it is an attempt to find an alternative option for getting quality health services outside the public healthcare system, financed through the compulsory social health insurance system in Bulgaria, due to its chronic state of underfunding, shortage of specialists, unsatisfactory infrastructure and equipment and so on, which largely has a deterrent and socially demotivating effect.