Kenya: NHIF Move Could Ease Medical Care

Kenya: NHIF Move Could Ease Medical Care


All Africa: The aggressive move by the National Hospital Insurance Fund to cover the large number of employees in the public sector could lead to reduced insurance premiums in whole industry. The providers might also revamp their product offerings to match charged premiums as competition intensify.

Ina few weeks NHIF has signed two major deals likely to ruffle the health insurance market. This week it signed a Sh4.2 billion premiums per year deal with Teachers Service Commission bringing in over 260,000 teachers on board. Last month it signed another deal worth Sh4 billion with 221,000 civil servants and disciplined forces. "The move will more than likely make insurers take a long hard look at their product and service offering," Peter Kamunyo,the head of Healthcare Division at AON. The NHIF packages has been viewed as among the best and most affordable in the market presently.

Previously,NHIF did not cover out-patient medical expenses, creating a market gap for private insurance providers to fill. "Medical insurance and medical insurance products and services have lately not been measuring up as compared to the other insurance products,"says Kamunyo. For just an additional Sh100 to Sh200 in all hospitals, the families will access services like consultation, laboratory tests, drugs, dental, optical,midwifery and radiological examinations and cover extends to retirement at no premiums.

NHIF's new accounts are above the entire medical insurers premiums , according latest(2010) industry figures by Association of Kenya Insurers. Gross premiums for medical insurance in 2010 was Sh7.4 billion, making a net earning of Sh5.89 billion yet the net incurred claims touched Sh4.8 billion. "Medical inflation is out of control and medical insurance has been making losses for the past couple of years," with the highest loss ratio of 81.5 per cent .

The NHIF scheme will also increase penetration of insurance, and in particular medical insurance still at low very low levels. Resolution Health CEO Peter Nduati said,"It is a boon to our industry as it will increase awareness and penetration". But NHIF may be faced with the ever increasing costs in the country.According to KNBS the cost of health has gone up by 7.11 per cent in the last one year, with a 1.16 per cent rise in the last month alone due to higher costs medicines and treatment charges. "I think it is very good if they can sustain it," said Nduati.