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Sunday, November 28, 2021

Insurers oppose new NHIF draft law

By Otieno Kwach

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Association of Kenya Insurers (AKI) is the latest organization to oppose National Hospital Insurance Fund (NHIF) Amendment Bill which seeks to coerce Kenyans to contribute towards fund without assuring Kenyans reliable services and transparency in the fund.

The insurers body is concerned that the requirement for employers to match employee contribution will impact on the cost of labour and will deal a blow to the insurance industry premium which contributes to slightly over 2 per cent of the country’s Gross Domestic Product (GDP).

“The increased cost of labour will lead to more employee layoffs further aggravating the already bad unemployment situation in the country,” said AKI Executive Director Tom Gichuhi in a statement.

AKI also argues that high cost of labour will make Kenya unattractive to foreign investors especially in labour intensive industries such as agriculture and hospitality services, adding that investors may opt to move to other countries where the cost of labour is more manageable.

The proposed law in section 15, states that contribution will be by all Kenyans from 18years and above in both formal and informal sector. Employers are required to contribute an amount equal to that which they have remitted on behalf of their employees.

According to Gichuhi, the proposal that where one has a private insurance, the private insurer will be required to pay first and NHIF will come in once the benefits of the private insurer are exhausted will increase the cost of healthcare.

Gichuhi argued that the proposal will increase the cost of providing private medical insurance which will reduce uptake in turn, which will result in over reliance on the NHIF cover.

“When pricing medical insurance policies, insurers discount the premium on the basis that NHIF will take the first layer of the cost as per the set limits and then private cover caters for the balance. Insurance business shrinkage will impact on private insurer’s contribution to the economy through taxes, investment and employment,” said Gichuhi.

And now the Association of Insurers are proposing that employers who are able to sponsor their employees for private medical covers should be exempted or allowed to opt out of making the matching contribution.

The insurers also wants employers running their own clinics should be allowed to opt out provided they are able to demonstrate that they are offering more than the basic healthcare services.

“The bill should provide room and encouragement for voluntary action by individuals to provide more than the minimum required cover. Private medical insurers should pay of NHIF cover in line with global practices,” said Gichuhi.

The bill also seeks to enhance the mandate and capacity of NHIF to facilitate and deliver Universal HealthCare (UHC), piloted in Kisumu, Isiolo, Machakos and Nyeri counties before being rolled out to the rest of the country.

AKI joins a Central Organization of Trade Unions (COTU) in poking holes to the bill currently before the House.

Cotu has questioned what the bill is seeking to do with the money NHIF will be collecting from Kenyans aged above 18 years yet the same fund has been unable to manage money contributed by the over 8 million NHIF contributing members.

Cotu argued that making the proposed changes in NHIF will coerce them to re-establish their own body funded and run solely by workers in COTU.

“We demand that the government should stop any move aimed at interfering with the structure and the objective of NHIF and that if the government is in dire need of a scheme, it should create its separate healthcare scheme to provide affordable care to be used by the vulnerable persons,” said Cotu Secretary General Francis Atwoli in a statement.

COTU and all its 45 Affiliate Unions, and its more than four million members, oppose, in totality the amendments as contained in the NHIF amendment bill.

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