Private insurers are opposed to the National Hospital Insurance Fund (Amendment) Bill, 2021 that will see them foot most medical bills with NHIF only stepping in when the cover is exhausted.
The Association of Kenya Insurers (AKI) on Wednesday said the proposals that are before Parliament will see the cost of providing private medical insurance cover shoot up if adopted.
“Where a beneficiary has a private health insurance cover…the Fund shall cover the outstanding bill where private insurance cover’s limits have been exhausted subject to the Fund’s applicable limits,” the Bill, sponsored by National Assembly Majority Leader Amos Kimunya, proposes.
Insurers contend that NHIF should cater for primary health care and that private insurers should only pay net of NHIF cover, adding that doing this will make private insurance cheaper for the public who want to supplement their primary medical cover.
“When pricing medical insurance policies, insurers discount the premium on the basis that NHIF will take the first layer of cost as per the set limits and then private cover caters for the balance. This proposal will increase the cost of providing private medical cover which will reduce uptake. In turn, there will be over-reliance on NHIF cover,” AKI argues.
Employee contribution
Insurers also fear that the Bill’s proposal for employers to match their employees’ monthly contributions will sound a death knell to them as employers will seek to cut their costs by either dropping or reducing the supplementary cover of their employees with private medical insurers.
However, in a reprieve to employees, the Bill bars employers from deducting their matching contribution to NHIF from their salaries.
“The requirement for employers to match employee contributions will impact on the cost of labour. Consequently, employers who have supplemented their employees’ NHIF insurance cover with private medical insurance may cease to do so or considerably reduce the benefits to mitigate the rise in labour-related costs,” AKI said.
“This will deal a blow to the insurance industry premium which contributes to slightly over 2 per cent of the country’s Gross Domestic Product,” it said.
AKI now wants employers that sponsor their employees for private medical cover to be exempted or be allowed to choose not to make matching contributions to NHIF.
The Bill, if passed by Parliament, will also see every Kenyan above 18 years contribute a mandatory Sh6,000 per year to NHIF. BY DAILY NATION