Medical cost inflation raises insurance claims by 47pc

 

Former NHIF CEO Richard Kerich (right), Marwa Chacha (centre) and David Chingi at the High Court on October 2 where they were jointly charged with conspiring to defraud NHIF. Photo/PHOEBE OKALL  NATION MEDIA GROUP

By GEORGE NGIGI

Medical cost inflation and rise in uptake of health insurance has raised patient claims by 47.8 per cent in the nine months to September, surpassing total payments made last year.

Data from the Insurance Regulatory Authority shows that medicals claims incurred by insurance firms stood at Sh6.9 billion in September compared to Sh4.7 billion last year. Insurance companies have already paid Sh6.7 billion of these claims from Sh16.6 billion they have collected as medical premiums.

“Medical costs have been going up and more people are becoming aware of the need for medical insurance,” said Isaac Ngaru, managing partner at Ngaru and Associates.

More employers have been offering their staff medical cover schemes as part of the remuneration package.

Sale of bancassurance services by banking institutions, which have a greater penetration than the insurance sector, has also resulted in increased uptake of health covers.

Jubilee Insurance had the largest claims of Sh1.5 billion, UAP settled bills worth Sh1.4 billion while CIC paid out Sh1.2 billion.

The Association of Kenya Insurance has in the past complained that health providers were exaggerating treatment costs for patients who had insurance cards compared to cash payers.

“Some patients are taken through unnecessary medical procedures such as multiple laboratory tests while others are admitted despite having minor ailments,” said AKI chairman Mark Obuya in an earlier interview with the Business Daily.

Medical insurers have reported underwriting losses, which are attributed to rise in medical cost, competition and overcharging. Mr Ngaru also noted that the uptake of medical insurance by more underwriters was denying some players economies of scale.

The National Health Insurance Fund has also been seeking to increase contributions by 600 per cent, but the process has been challenged in court by the workers body Cotu.

Medical claims surpassed commercial motor vehicle claims for the first time, underlining the changing dynamics.