The 15 percent standoff between hospitals and insurers

Source: Nida Al Watan

Hospitals have entered 2026 much as they did the previous year, carrying with them a renewed demand for a 15% increase in the hospital tariffs agreed upon with insurance companies. As has been the case every time this issue resurfaces, the demand has reignited tensions between the two sides. Amid sharply opposing positions, Nidaa Al Watan has learned that a meeting is scheduled for next Wednesday between the Association of Insurance Companies and the Syndicate of Private Hospitals, in an attempt to reach an agreement.

Both the Association of Insurance Companies in Lebanon and the Hospitals Syndicate appear firmly entrenched in their respective positions, with neither side willing to back down. The Hospitals Syndicate argues that a tariff increase is unavoidable given the sharp rise in hospitalization costs, and in line with the gradual increases previously agreed upon, which were meant to eventually restore tariffs to 100% of their pre-2019 levels. Insurance companies, however, maintain that hospital tariffs have already returned to their 2019 levels and that any additional increase in hospitalization coverage will ultimately be passed on to policyholders, who would once again bear the burden.

Before delving into the details of the upcoming meeting, it is necessary to revisit the past few years. In the immediate aftermath of Lebanon’s financial collapse, the national currency plunged, prompting public guarantor institutions to slash hospitalization coverage by 80% to 90%. Insurance companies, for their part, began collecting part of insurance premiums in fresh US dollars and eventually restricted full coverage to policyholders paying entirely in cash dollars, excluding payments in “lollars” or Lebanese pounds.

Against this backdrop, and specifically during the height of the crisis in 2021 and 2022, the Hospitals Syndicate and insurance companies reached an agreement under which 50% of 2019 hospital tariffs would be paid in fresh dollars. This rate was set to increase annually to 55%, then 65%, then 70%, with the aim of reaching 100% of pre-crisis tariffs by the end of 2024. However, insurance companies refused last year to approve an additional 15% increase. As a result, according to Hospitals Syndicate President Dr. Pierre Yared, contractual tariffs remain at 70% of 2019 rates for in-hospital services and 50% of 2019 rates for external imaging and diagnostic tests conducted outside hospitals, despite the fact that insurance premiums have already returned to their pre-crisis levels.

Yared added that this comes at a time when hospitalization costs have surged, particularly electricity and fuel expenses, while the prices of medical supplies have increased significantly compared to six years ago. Salaries for hospital staff, he noted, have also returned to, and in some cases exceeded, their 2019 levels. “Given the cumulative inflation of the past six years,” he said, “tariff increases should realistically range between 20% and 30%.”

The special case of university hospitals

Addressing criticism over allegedly inflated bills charged by university hospitals, Yared explained that their operating costs are inherently higher than those of smaller hospitals. “They are teaching hospitals that train students and continuously adopt the latest medical technologies, which are extremely costly,” he said. He added that insurance companies maintain on-site monitors in hospitals who review insured patients’ files and have the authority to reject unnecessary tests requested by doctors.

In light of these differences, Yared argued that a blanket 15% increase should not apply to all hospitals. “For university hospitals, for example, an increase of 10% or 12% could be considered,” he suggested.

For Yared, the priority lies in bringing all parties to the same table and reaching consensus on the necessity of adjusting hospital tariffs, potentially through gradual increases rather than a single, immediate hike.

This raises a broader question: between protecting citizens and safeguarding hospital viability, where does the imbalance lie in Lebanon’s health insurance equation?

The insurance control commission’s perspective

The position of the Insurance Control Commission at the Ministry of Economy introduces a different approach to the dispute, one that shifts the focus away from sectoral rivalry and toward the direct impact on citizens. From this perspective, rejecting the proposed 15% increase is not merely a technical or administrative decision, but one with clear social and economic implications, particularly amid a cost-of-living crisis that leaves little room for further increases in health insurance premiums.

Commission President Nadim Haddad told Nidaa Al Watan that the commission does not treat all hospitals alike, but distinguishes between two different models within Lebanon’s healthcare system. On one hand are large university hospitals whose tariffs, according to available data, have become excessively high, sometimes exceeding those of other hospitals by up to 40%. This imbalance, he said, distorts relationships with insurance companies and ultimately places citizens in the weakest position, forcing them to absorb higher premiums while facing reduced access to healthcare.

More alarming, Haddad warned, is the rise of the loss ratio to “dangerous” levels, meaning that a significant portion of policyholders’ premiums is being consumed by reimbursements, leaving insurance companies with little financial buffer. If this trend continues, it could threaten the sustainability of the entire sector, not just its short-term balance.

Haddad also stressed that the debate cannot be separated from the structural decline of the insurance sector itself. Sector revenues have fallen from approximately $1.4 billion before the 2019 crisis to around $900 million today, while the number of insured individuals has dropped from nearly 900,000 to roughly 400,000. This contraction, he said, reflects not just a numerical decline but a deeper imbalance between healthcare costs, hospital pricing, and citizens’ ability to afford insurance. Under these conditions, arbitrary increases in hospital contracts could jeopardize what little stability remains.

At the same time, Haddad emphasized the need for a fairer assessment of conditions in peripheral regions, where small, non-university hospitals suffer from unjust tariffs in their contracts with insurance companies. This weakens their ability to operate, develop, and provide adequate services to residents in rural and remote areas. Revisiting these tariffs, he argued, is a legitimate corrective measure rather than an added burden.

The underlying message, according to the commission, is clear: the problem is not the principle of an increase itself, but the lack of fairness in how increases are distributed. Across-the-board hikes deepen existing distortions, while a differentiated approach, based on realistic criteria and hospital-specific conditions, offers a rational path toward reform.

Thus, the debate shifts from a clash of sectoral interests to a larger question: how can Lebanon build a balanced healthcare system that does not overburden citizens, undermine insurance sustainability, or marginalize hospitals, especially when the citizen remains at the center of the equation? The answer, it appears, lies not in blanket percentages, but in smart, fair, and differentiated policies that address structural flaws rather than reproduce them.

Previous demands

It is worth recalling that at the end of 2024, the Hospitals Syndicate demanded a 15% increase for 2025 on the tariffs paid by insurance companies, citing premium increases imposed that year and the fact that contracted tariffs remained below 2019 levels. Insurance companies rejected the request, approving increases of only 2% to 4%.

The same 15% demand has resurfaced for 2026, reviving concerns over its repercussions. Insurance companies argue that such an increase would inevitably translate into higher health insurance premiums, which have already returned to pre-2019 levels, leaving citizens unable to bear further hikes.

If insurance companies maintain their refusal at Wednesday’s meeting, hospitals are unlikely to retreat. Instead, they may escalate pressure and propose a phased increase, as Yared suggested, such as a 7% or 8% hike in the first half of the year, followed by the remainder in the second half. Should all attempts at tariff correction fail, the Hospitals Syndicate may convene a general assembly to determine its next steps.

In that case, the two sides would be headed toward a full confrontation, while citizens, the primary stakeholders in this dispute, remain powerless, anxiously awaiting the fate of their health coverage.