NHIF reforms should not impair private medical insurance

Currently, NHIF pays only a limited amount for the hospital bed and some procedures.

By Ashok Shah CEO of The Apollo Group

Good health is an essential ingredient for economic development. A nation cannot develop unless its citizens are healthy. It is for this reason, we believe, that the Government of Kenya is making sustained efforts to ensure access to quality universal health care (UHC) for all.

Alongside interventions for setting up infrastructure and equipping medical facilities in Kenya, attention has also been directed towards ensuring healthcare is affordable to everyone. In this respect, health, also referred to as medical insurance currently offered as a product by a number of reputable insurance companies has been an effective cushion.

By having medical insurance, individuals and their dependants, are assured of medical attention when unwell.  It is essential to build a healthy nation and to provide a sense of comfort and peace of mind. Medical insurance is intended to shield individuals and families from the economic shocks that come with serious, prolonged and critical illnesses.

Over the years, efforts have been made towards expanding health insurance coverage and penetration. We have the government run National Health Insurance Fund (NHIF) and private medical insurers. The Insurance Regulatory Authority (IRA) estimates the medical insurance class accounted for 34.4 per cent of the industry’s gross premium income for general insurance during the fourth quarter of 2020 alone.

The low penetration can be attributed to the fact that Health Care in Kenya has two main providers.  The Public Hospitals and the Private Hospitals.  Private Hospitals offer quality services but the cost of treatment is relatively high and beyond the reach of most needy consumers. Therefore, there is a genuine need for good medical insurance to make these treatments affordable.

In an effort to deliver universal healthcare coverage, as envisioned under the Big Four Agenda, the Government of Kenya has initiated reforms in NHIF.  According to many health experts who have participated in a discourse on the issue, the amendment bill before Parliament unfortunately risks doing more harm than good to the provision of universal health care in the country as envisaged.

The need to reform NHIF to make it more effective in enhancing access to healthcare is indisputable. However, it should be done in a manner that does not reverse gains made. The National Hospital Insurance Fund (Amendment) Bill, aims to insert a new Section; 15A to making it mandatory for any person who has attained the age of 18 years to register as a member of the Fund. The fund has also changed its benefits and rules so abruptly and frequently that it disadvantages its clients.  An example of these changes is NHIF’s decision to stop benefits during the Covid-19 Pandemic.  NHIF stopped paying for any Covid-19 related claims, a practice that negates the desire for universal health care.  In the meantime, private Health Insurers have continued to pay for these claims.  Indeed, APA has been paying all Covid-19 related claims to the full policy limit.

Currently, NHIF pays only a limited amount for the hospital bed and some procedures. It is treated as the primary cover, taking care of most costs in public and mission hospitals. The proposed amendments intend to change the model to one where insurers pay for costs first until exhaustion of the cover before NHIF kicks in. This will lead to an unequitable situation where the ill will find themselves being denied treatment.

To finance this, the amendments propose that employers match their employees’ contributions. These additional costs on employers are likely to have a cascading effect on employees, because employers are likely to cut back on the quality private medical insurance covers taken out for staff to offset the additional employee cost. If this is effected, it will impact negatively on the future and quality of health care, as the effect reduce the revenue for private hospitals. Currently, most private hospitals, which have some of the best facilities, derive 80% of their income from the insurance sector. If employers cut back insurance covers, then we will see less financing of treatment and a bigger burden on the individuals.

For NHIF to be impactful in enhancing universal healthcare coverage, it should be structured in a way that prioritizes provision of basic medical coverage at affordable facilities (public and mission hospitals) before expanding to costlier health care providers. The fund should define the basic package accessible to all with clearly defined benefits, price points, and accessible services and providers. The basic low-cost package for public and mission hospitals would be separate from the private hospital one, which would attract additional premiums to manage costs and reduce fraud and wastage, particularly by the use of technology.

This would ensure that the hospitals are able to improve their services as they will benefit from income from private medical insurers and the NHIF. The Government must acknowledge that we already have a working model for health care.  The private sector has taken on the burden of not only investing in health care, but financing it.  The private health covers have superior benefits which NHIF cannot provide and need not provide as NHIF. The focus for the NHIF should be on delivering universal healthcare coverage.

In addition, instead of increasing the burden on those who want to provide for their own health care, the Government should allow an opt out clause.  For instance, this clause would allow anyone with a minimum approved cover, not to contribute to NHIF.

APA Health Insurance’s benefits, for instance, covers about 120,000 lives, including 700 corporate schemes and 7,000 individual family policies. APA prides itself in delivering comprehensive cover, with a wide healthcare provider network, and premium customer experience enabled by technology. APA Health Insurance benefits are designed to offer comprehensive coverage, and provides options for inpatient, outpatient, dental, optical and maternity covers. The comprehensive health insurance by APA also covers chronic conditions. APA Comprehensive Health Insurance was the first to cover Covid-19 and HIV/AIDs.

For APA Health Insurance and other Medical Insurance providers to continue making their contribution towards universal healthcare coverage, we need a better, more inclusive dialogue and partnership with the Government of Kenya, while encouraging more cooperation and collaboration.


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Dr. Hanningtone Gaya

Dr. Hanningtone Gaya

Kenya’s Dr Hanningtone Gaya, holds a PhD in Commerce in Business Management from Nelson Mandela University (NMU), is viewed as an authority in country branding and is the founder chairman of the Brand Kenya Board.

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