As the country continues to wait for the establishment of a National Health Insurance Scheme, NHIS, the Insurance Regulatory Authority of Uganda, IRA, is moving a step towards responding to the gaps created by the lack of the scheme.
For more than 10 years, it has been a back-and-forth situation regarding universal health insurance platform, with disagreements between the executive, parliament, insurance companies and medical service providers, among others on the structure, financing and services.
The absence of the scheme has been blamed for the poor health system of the country in terms of costs, service levels and accessibility, even as other countries in the region are either implementing or developing one.
To respond to existing challenges caused by the absence of the NHIS, IRA set out to examine how the existing health insurance is perceived by the public, both corporates and individuals and what can be done to make it better.
The Chief Executive, Ibrahim Kaddunabbi Lubega, said that from the study, the undertakings by the government and the insurance industry should enable more Ugandans to take up health insurance even before the NHIS law is enacted.
Some of the challenges include the high costs of insurance especially to individuals, including consultation fees and treatment bills. Another critical finding was that there is high competition amongst medical insurance companies and these use price cuts to get customers, especially the corporate clientele.
Bernard Obel, IRA Director for Supervision, says that the problem with is that such insurance companies risk failure to pay when the hospitals lodge their claims.
This is one of the reasons that the they have decided to standardize consultancy fees, treatment fees as well as the premiums payable by customers. These will be clustered according to the level and standard of medical services provided by the different categories of hospitals, according to Obel.
The study by IRA was aimed at tracking formal medical insurance performance, establish its challenges, as well as future prospects, in order to inform policy formulation and make vital recommendations for insurance sector reforms. In the end, according to Kaddunabbi Lubega, the finding should advise on how to make healthcare cheaper, more accessible and better.
“This is so because, it protects the insured against medical or related risks and reduces the burden of exorbitant out-of-pocket expenditures on healthcare which tend to keep many people from accessing quality healthcare,” he said.
The study specifically sought to establish the performance of medical insurance, the level of satisfaction among beneficiaries, corporate clients and service providers, stakeholder expectations, challenges and future prospects of medical insurance.
Medical insurance gross written premiums increased from 107.6 billion shillings in 2014 to 244.98 billion in 2021.
On the cost of insurance, three quarters of the corporate respondents said that the premiums paid were adequate for the service, 23 percent noted that it was high while 3 percent said the that the benefits received outweigh the costs paid.
Individual clients on the other hand noted that the premiums were high and therefore not affordable by the majority even though the services received were reasonable.
Protazio Sande, Director Planning, Research and Market Development said individuals find it more expensive because insurance gets cheaper when the number is bigger.
Kadduunabbi says this shows how much Ugandans are aware about medical insurance, and the need or the companies to increase intensify innovation.
The study also found that health insurance growth was being hindered by delays by insurance companies to pay claims by the medical service providers. It is said that some hospitals have terminated contracts with some insurance companies or abandoned providing the services altogether because the delays affect their cash-flow projections and liquidity.
Out of 50 service providers interviewed, 32 (64 percent) received payment three months after lodging their claims, 10 (20 percent) after two months while only 8 (16 percent) received their payments in one month and below. “The inherent risk in this is a possibility of increase in the cost of healthcare services to the insurers as service providers incorporate time-value-of-money into their pricing models. Ultimately, this may impact on the premiums charged,” said the CEO.
The study revealed that despite the growth and notable potential, medical insurance in Uganda is still grappling with challenges, including over charging of medical services by medical service provider. Obel also cited insurance fraud committed by clients or sometimes through connivance, but said the capacity of the fraud police.
The recommendations from the study include establishment of claim settlement guidelines specifically for medical insurance to guide on the timeline, introduction of a standard co-payment system to minimize policy abuse in form of unnecessary hospital visits and setting minimum premium rates for medical insurance by developing a minimum package.
It also recommends discussions with relevant medical councils to put in place a standardised pricing mechanism for medical services for insurance to curb overcharging of medical services. There is also the need for insurers to partner with service providers, even in rural areas, to expand reach, as well as develop digital platforms to monitor usage at the service provision points.
These, Kaddunabbi says should help streamline medical insurance as the country awaits the enacting of the NHIS Bill which he says has been much improved from the one that was returned by the president. He says that the new Bill will soon be passed by cabinet and tabled by the Minister for Health before parliament. The new law, according to him will then be implemented in phases but that within five years, it will be comprehensively implemented.