Social health insurance is an insurance system that seems to cater for the welfare of the people. It is seen to cover the poor and the vulnerable who would have found it difficult to access quality health. Because it is normally established by a government statute, it is involved with subsidies from the government thereby making the consumers to pay little in terms of premium contributions. Social health insurance has therefore made it easier for people to get health care and therefore able to cover for medical expenses. A look into the social health insurance systems in the five countries in Europe namely Switzerland, Germany, Belgium, the Netherlands and Israel seems to have improved since their establishment. In Germany which is the case study, the SHI covers about 92% of the population. Risk adjustment mechanisms have also been introduced in the SHI so as to make payments reflect more accurately on the actual health status of the enrollees. For the purposes of this study, the writer takes a look into the risk adjustment mechanisms that have taken place in the five European countries namely Switzerland, Belgium, Germany, the Netherlands and Israel. Germany is the case study, therefore the writer sought to see the role of social health insurance established in the country and the impact of risk adjustment mechanisms introduced into the system. The writer who comes from Ghana in Africa also took the opportunity to take a look into the Ghanaian health insurance system which was introduced not quite long ago and deliberates on how it could be improved. The use of secondary data forms the basis of the methodology. Articles, books, journals, lecture notes and internet sources were used in compiling this study. However, primary data in the form of unstructured interview was used to get information concerning the Ghanaian National Health Insurance. The study brought to light that when risk adjustment is not used properly, it could create a problem of selection. Risk sharing is therefore a very good method to reduce selection. It was realized that a very good means to achieve the benefits of a competitive health insurance market is to introduce a very good risk adjustment model.