In 1947 the Iranian Tobacco Company insured their employees against health expenditure and health services. The first Labour Social Insurance law was legislated in 1952 when the Labour Social Insurance Organisation officially became part of the Ministry of Work and Social Services (2
). In 1974, the Ministry of Social Welfare was created to coordinate the previously dispersed activities relating to social welfare. The Social Security Law expanded the supportive services provided by insurance companies and made it compulsory for all workers to get insurance coverage from the Social Security Organisation in 1975 (3
In 1979, the Iranian parliament merged the Ministry of Social Welfare into a Ministry of Health and renamed it the Ministry of Health and Welfare, with the Social Security Organisation also being placed under the management of this new Ministry. This organisation was renamed the Social Security Insurance Organisation (SSIO) in 1980 to emphasise the importance of the health insurance services. The SSIO currently covers more than 27 million people (36% of the Iranian population) across the country. Almost all of its customers are workers and employees in the private sector where coverage is compulsory by law. It has two specific features which make it different from other health insurance organisations. First, its financing system is mainly independent from the government providing it with more freedom to manage its sources and services. A total of 30% of the employee’s wages is paid in the following proportions: government, 3%; employee, 7%; and employer 20%. One-third of this premium is for supporting health and two-thirds supporting pensions (4
Secondly, the organisation has two service departments that work alongside each other; the pensions department and the health department. The Health department acts as both a provider and a consumer of health care services. As a provider it provides services in its health centres and hospitals which are free of charge for SSIO insured people. As a consumer, the organisation is to pay 90% of inpatient and 70% of outpatient costs to health care providers who are contracted to the organisation (4
); but it is now failed to meet these requirements (see below).
Imdad (Relief) Committee Health Insurance (ICHI) is a charity based health insurance body that was established shortly after the 1979 revolution to provide the basic level of insurance coverage for poor citizens who cannot afford to pay any insurance premium. Around 20% of its revenue comes from charitable donations and the government provides the rest. ICHI currently covers about 4.5 million disadvantaged people (5
The Public Health Insurance Law in 1994 sought to cover nearly 60 percent of uninsured Iranian population (6
). The Medical Services Insurance Organization (MSIO) was created based on this law in October 1994 to cover a wide range of individuals within five years (7
). These included governmental employees and all individuals of the community with various socioeconomic levels that were not eligible to be covered by other health insurance organisations. From the introduction of MSIO the proportion of the population covered by health insurance increased from 40% in 1994 to about 90% in 2010 (7
). This is while the number of the population also has increased from 57.7 million in 1994 to 74.7 millions in 2010 (8
). This increase has happened mainly in rural areas (7
), where the ability to pay is more likely to be lower than urban areas. However, the target of full coverage of the population has not been met yet. MSIO is now the largest health insurance organisation in Iran, covering 39 million people (7
MSIO has various types of insurance policy, with the premiums being dependent mainly on a per capita rate for health care (PCHC). Determination of the PCHC is one of the main duties of higher insurance council (see below).
Governmental employees, those in rural areas and specific groups such as students receive government subsidies. shows the insurance accounts of MSIO and the level of subsidies that various groups receive.
Existing Accounts of MSIO and their percent of subsidises and payments
The Armed Forces Medical Services Insurance Organisation (AFMSIO) covers around four million people in the armed forces and their families. Its services and policies are very similar to MSIO but it is funded directly by the Ministry of Defence. Private insurance companies also provide policies that reimburse the co-payment share of patients’ health expenditures which is 30% for outpatients and 10% for inpatients services, in addition to providing certain services and facilities that main health insurance organisations do not cover.
Policy with regard to health insurance is developed by the Higher Insurance Council (HIC) and communicated to all health insurance organisations to implement. The council was established in 1994 to undertake policy planning, coordinating and conducting, monitoring and evaluating the quality and quantity of health insurance services.
The Council has a wide range of duties including determination of per capita for health care, determination of the level of insurance premiums and patient contributions, and decisions relating to the inclusion or exclusion of medical services and health technologies.
The Minister of Welfare and Social Security (head of the council), Minister of Health, and directors of SSIO, MSIO, AFMSIO and ICHI are of main members of the HIC. All decisions of the HIC must be ratified by the cabinet to be implemented. Health Insurance organisations (HIOs) had faced numerous challenges in late 1990s. The first was that they failed to meet the Public Health Insurance law's target in covering all Iranian population by 1999. The second was increasing concern regarding financial difficulties of the HIOs. These two led to a considerable increase in out of pocket health expenditures (9
) with spending of patients for health care services increasing to 56 % (11
). Many policy makers thought that while the Ministry of Health had considerable concerns regarding delivery of health care services, it was very hard for it to focus on HI challenges. Thus they suggested establishing a new ministry to overcome this problem. This resulted in 2005 in the development of f the Ministry of Welfare and Social Security (MWSS) to incorporate all health insurance organisations under one ministerial structure.