Health insurance industry faces major changes in new plan

The medical insurance industry in Kenya could be set for a major shake-up as the government lines up a raft of reforms targeted at protecting patients from exploitation by rogue service providers.

A consultancy picked by the National Treasury through the Insurance Regulatory Authority (IRA) has recommended radical changes in the industry’s operations, including the creation of an Ombudsman’s office to keep in check the activities of service providers and set maximum age-rated premiums charged on elderly citizens above 60 years and those with chronic conditions to curb discrimination.

The health insurance sector in Kenya is currently unfriendly to special customer groups such as the elderly and individuals with long-lasting medical conditions who are forced to part with premium fees or miss out on coverage.

The expensive age-rated premiums have negatively impacted the number of insured elderly people—leaving them dependent on relatives and friends for healthcare.

To curb this trend, the consultants have proposed a 200 per cent limit on the difference between the lowest and highest premium charged for a particular age-rated health insurance product.

Premium rates

“This proposal is expected to prompt insurers to create products with more affordable premiums for older individuals, which improve coverage. Older individuals are typically a client of an insurer for a long time and hence contribute a significant amount to the pool of funds throughout their lifetime,” the consultants said in a report seen by Daily Nation.

The experts also propose a review of the regulations for insurance cover for patients with chronic conditions to curb discrimination by insurers through premium rates or exclusion from cover.

“By removing this aspect from the health insurance market, consumer confidence in health insurance is expected to improve and as a result population coverage is expected to increase. Furthermore, since insurers cannot exclude claims arising from these chronic conditions it is expected that the level of services covered will improve and the level of out-of-pocket expenditure required by members will decrease,” the consultants recommended to IRA.

The consultants further propose a shake-up of the current non-uniform treatment protocols in hospitals that are exploited by some rogue individuals to increase their claims through unnecessary excess diagnostic tests.

This, they said, would define standard treatment pathways in collaboration with the Health ministry and the Kenya Medical Practitioners and Dentists Board and help to improve cost management.

Policy term

In another far-reaching measure, the experts want an Ombudsman’s office created to deal with public complaints in the medical insurance sector.

Though Kenya has an established Office of the Ombudsman, which has a two-fold mandate extending to both national and county government, it lacks powers to deal with private sector complaints. This means a large portion of the healthcare sector under private players is not covered.

Key areas of concern for insurance holders have been the long waiting periods before they could get approval for treatment and exclusions for pre-existing conditions. 

Records by IRA show that these waiting periods range between 12 and 24 months whereas the policy term is generally only a year.

The regulator also commonly gets complaints about instances where insured individuals obtained pre-authorisation for admission only for some insurers to decline payments after treatment on claims that the medical condition isn’t covered.