Health Insurance: Treatment for a Fixed Amount
Machine translationRead the Arabic original
Fatwa No. ( 20587 )
Q: From the Sharia Supervisory Committee of Al-Thumari General Hospital, peace be upon you, and Allah’s mercy and blessings. After that: This committee was formed about a month ago, headed by the general manager and the eldest son of the hospital owner. Its goal is to bring all of the hospital’s internal and external transactions within the framework of Islamic Sharia. The first and most important issue, which is central to the hospital’s current operations, is health insurance (treatment for a fixed amount). Here is a detailed explanation of how they deal with it: First: The method of the contract: A fixed monthly amount is agreed upon per person, whether they visit the hospital or not, and this amount increases or decreases based on the number of people registered with the hospital.
For example: If the company has 100 individuals, and an amount of 100 riyals per person per month is agreed upon, then the amount due to be paid monthly is 100 people × 100 riyals = 10,000 riyals. Naturally, the amount set for one person varies based on two things: 1 - The number of employees; as the number increases, the amount increases, the risk decreases, and the hospital’s profit increases. 2 - The exceptions agreed upon by the hospital and the company, and the exceptions not covered by the hospital, affect the amount; they may increase, in which case the amount decreases, or they may decrease, in which case the amount increases. These exceptions are, for example, not exhaustive: A - Anything exceeding three days in intensive care. B - Psychological and nervous cases. C - Chronic diseases. D - Heart diseases. E - Organ transplants. F - Dental implants. And so on. Thus, if the company agrees to let the hospital exclude many items, the amount decreases, and vice versa. Example: A company with 100 people, and no exceptions in the contract, would have an amount of, for example, 400 riyals per person. A company with 100 people, which allowed the hospital to write in exceptions agreed upon by both parties, would have an amount of 80 riyals per person. There is a termination clause in the contract with a one-month notice period, such that if one party is harmed, they must notify that the contract will be terminated after one month. There is also a condition sometimes included that the hospital covers the individual with, for example, no more than 10,000 riyals per year; that is, if their treatment exceeds this amount in the year, the company must pay, even if the agreement was for a fixed amount. Example: An agreement with the company that one person is 100 riyals monthly, meaning 1,200 riyals per year, so an amount of 10,000 riyals is set as the maximum per person, and the hospital has the right to claim what exceeds it. This is considered insurance for the hospital, and the risk is calculated. Second: Not dealing in this way leads to the following harms for companies: 1 - They do not spend on their employees’ treatment costs monthly, and are exposed to any surprises.
Are there any exceptions in the contract? For example, the amount might be 400 riyals per person, and a company has 100 people, and it allowed the hospital to write exceptions that both parties agreed to, so the amount per person becomes 80 riyals. There is a termination clause in the contract with a one-month notice period, such that if one of the parties is harmed, they must report that the contract will be terminated after one month. And there is a clause that is sometimes included, that the hospital covers the individual, for example, with no more than 10,000 riyals per year, meaning: if his treatment exceeds this amount in the year, then the company must pay, even if the agreement was for a fixed amount. Example: the agreement with the company is that the individual is 100 riyals monthly, meaning 1,200 riyals per year, so an amount of 10,000 riyals is set as the maximum for the individual, and the hospital has the right to claim what exceeds it, and this is considered insurance for the hospital, and the risk is calculated. Second: not dealing in this way leads to the following harms for companies: 1 - They do not spend on the treatment of their employees monthly, and they are exposed to any surprises.
2 - They incur the costs and troubles of monitoring workers who manipulate or feign illness. 3 - The costs of reviewing hospital bills, which the company fears may be manipulated or inflated in treatment to increase profit, and doing what is unnecessary in treatment and medication and the like, and this is widespread (and Allah is sought for help). 4 - The comfort of not assigning one or more persons at the company's expense to review the bills. And this method makes the hospital try to reduce the cost of treatment to the maximum extent without harming the patient's health in order to profit. Because of these points, the company intends to contract in the previously mentioned way, which benefits the company, which if it dealt with the bill would not be able to do that; due to its lack of medical expertise (with the company's knowledge that the hospital deals with it). Most hospitals and clinics deal in this way, but we hold fast, by the grace of Allah, to the Sharia aspect, and our not dealing in this way results in many companies turning away from the hospital, which would be a failure for it. And this system is the same as the health insurance system, which is under study by the Council of Ministers and the Shura Council, and cooperative medical insurance companies deal with it
medical insurance companies widespread in the Kingdom . It is requested from your Eminence to clarify the ruling on this matter.
A: Upon examining the aforementioned contract, it became clear that it contains gharar (excessive uncertainty) and gambling, and that it is one of the types of commercial health insurance, and therefore it is forbidden, so it is not permissible to deal with it.
Q: From the Sharia Supervisory Committee of Al-Thumari General Hospital, peace be upon you, and Allah’s mercy and blessings. After that: This committee was formed about a month ago, headed by the general manager and the eldest son of the hospital owner. Its goal is to bring all of the hospital’s internal and external transactions within the framework of Islamic Sharia. The first and most important issue, which is central to the hospital’s current operations, is health insurance (treatment for a fixed amount). Here is a detailed explanation of how they deal with it: First: The method of the contract: A fixed monthly amount is agreed upon per person, whether they visit the hospital or not, and this amount increases or decreases based on the number of people registered with the hospital.
For example: If the company has 100 individuals, and an amount of 100 riyals per person per month is agreed upon, then the amount due to be paid monthly is 100 people × 100 riyals = 10,000 riyals. Naturally, the amount set for one person varies based on two things: 1 - The number of employees; as the number increases, the amount increases, the risk decreases, and the hospital’s profit increases. 2 - The exceptions agreed upon by the hospital and the company, and the exceptions not covered by the hospital, affect the amount; they may increase, in which case the amount decreases, or they may decrease, in which case the amount increases. These exceptions are, for example, not exhaustive: A - Anything exceeding three days in intensive care. B - Psychological and nervous cases. C - Chronic diseases. D - Heart diseases. E - Organ transplants. F - Dental implants. And so on. Thus, if the company agrees to let the hospital exclude many items, the amount decreases, and vice versa. Example: A company with 100 people, and no exceptions in the contract, would have an amount of, for example, 400 riyals per person. A company with 100 people, which allowed the hospital to write in exceptions agreed upon by both parties, would have an amount of 80 riyals per person. There is a termination clause in the contract with a one-month notice period, such that if one party is harmed, they must notify that the contract will be terminated after one month. There is also a condition sometimes included that the hospital covers the individual with, for example, no more than 10,000 riyals per year; that is, if their treatment exceeds this amount in the year, the company must pay, even if the agreement was for a fixed amount. Example: An agreement with the company that one person is 100 riyals monthly, meaning 1,200 riyals per year, so an amount of 10,000 riyals is set as the maximum per person, and the hospital has the right to claim what exceeds it. This is considered insurance for the hospital, and the risk is calculated. Second: Not dealing in this way leads to the following harms for companies: 1 - They do not spend on their employees’ treatment costs monthly, and are exposed to any surprises.
Are there any exceptions in the contract? For example, the amount might be 400 riyals per person, and a company has 100 people, and it allowed the hospital to write exceptions that both parties agreed to, so the amount per person becomes 80 riyals. There is a termination clause in the contract with a one-month notice period, such that if one of the parties is harmed, they must report that the contract will be terminated after one month. And there is a clause that is sometimes included, that the hospital covers the individual, for example, with no more than 10,000 riyals per year, meaning: if his treatment exceeds this amount in the year, then the company must pay, even if the agreement was for a fixed amount. Example: the agreement with the company is that the individual is 100 riyals monthly, meaning 1,200 riyals per year, so an amount of 10,000 riyals is set as the maximum for the individual, and the hospital has the right to claim what exceeds it, and this is considered insurance for the hospital, and the risk is calculated. Second: not dealing in this way leads to the following harms for companies: 1 - They do not spend on the treatment of their employees monthly, and they are exposed to any surprises.
2 - They incur the costs and troubles of monitoring workers who manipulate or feign illness. 3 - The costs of reviewing hospital bills, which the company fears may be manipulated or inflated in treatment to increase profit, and doing what is unnecessary in treatment and medication and the like, and this is widespread (and Allah is sought for help). 4 - The comfort of not assigning one or more persons at the company's expense to review the bills. And this method makes the hospital try to reduce the cost of treatment to the maximum extent without harming the patient's health in order to profit. Because of these points, the company intends to contract in the previously mentioned way, which benefits the company, which if it dealt with the bill would not be able to do that; due to its lack of medical expertise (with the company's knowledge that the hospital deals with it). Most hospitals and clinics deal in this way, but we hold fast, by the grace of Allah, to the Sharia aspect, and our not dealing in this way results in many companies turning away from the hospital, which would be a failure for it. And this system is the same as the health insurance system, which is under study by the Council of Ministers and the Shura Council, and cooperative medical insurance companies deal with it
medical insurance companies widespread in the Kingdom . It is requested from your Eminence to clarify the ruling on this matter.
A: Upon examining the aforementioned contract, it became clear that it contains gharar (excessive uncertainty) and gambling, and that it is one of the types of commercial health insurance, and therefore it is forbidden, so it is not permissible to deal with it.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.