Beyond the NHIF rates deception

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BY TOM KINYUA

I thought it worthwhile to respond to assertions by Ms Diana Patel in the Daily Nation dated August 13, 2010. I am of the view that Ms Patel\’s assertions are not consonant with those of a majority of Kenyans and for the sake of the majority I seek to shed some light on the issue.

For a majority of the educated and or informed elite in this country, the benefits of a free market economy cannot be overemphasised. We all know the advantages of the free market but we are certainly not oblivious to the disadvantages and the need to ensure that the government plays its part to ensure that no section of society is left deprived due to business considerations that may be adverse to the interests of particular demographics of the society.

From what I discerned from Ms Patel\’s arguments, she advocates for private funded healthcare insurance as opposed to publicly funded insurance schemes such as the NHIF. As aptly put, and thanks to her, she has reminded us of the very reasons the NHIF was set up.

"To address the development gap in the insurance market" since very few people had access to medical insurance. I don\’t know where it is she lives but I suppose Ms Patel is not aware that a majority of Kenyans are still not covered. This, simply because of the high cost of insurance premiums imposed by private Insurance companies.

Private Insurance companies like all other businesses are profit oriented; Private insurance covers are risk based. Insurance companies selectively Insure and determine premium rates for citizens with an inclination to making insurance covers cheaper for those with low probability of falling sick so that the likelihood of them paying up on the insurance covers is greatly reduced.

To put it modestly, "Insurance companies are in the business of Insuring the Healthy". HIV/AIDS patients and those suffering from terminal illnesses have to pay higher premiums to be guaranteed access to healthcare. The NHIF does not conform to such practices. The contributors are not subjected to compulsory eligibility tests for them to be covered. All they have to do is contribute and they are covered.

Industrialised nations such as the United States which have well established private funded healthcare insurance schemes are yet to attain the ultimate aspiration; that of universal coverage for all citizens. Despite years of free market endorsed healthcare insurance plans, statistics show that among the industrialised nations, the United States of America guarantees the least healthcare coverage for the poor among its population.

The enactment of the Healthcare and Education Reconciliation Act 2010 which previously met stiff opposition from a section of the political class seeks to address this problem. Medicare will now be available to more poor Americans. The Act imposes a tax to individuals who do not procure health insurance and are capable of taking out insurance. It provides for incentives to businesses to encourage them to provide healthcare benefits for their employees.

The Act prohibits denial of coverage and denial of claims based on pre existing conditions. It provides for government to subsidise on insurance premiums for certain classes of people. Some of these measures like the ones on prohibition of denial of coverage are meant to curb certain practices which are common in private insurance, measures we have not employed and nobody is suggesting in their relentless condemnation of the NHIF.

A first world country is stepping in to address inequities in its population by seeking to expand on healthcare coverage and yet an economist from the third world is telling us that a third world government should let go and let be. Is that not disingenuity? 

Some of the most successful healthcare reform strategies employed in the world today are those based on public funded healthcare Insurance schemes. A case in point is Taiwan. Taiwan implemented a compulsory health insurance plan which centralizes the disbursement of healthcare funds.

This fund is financed through premiums based on the payroll tax which is supplemented by direct government funding. As it is now in Taiwan there is guaranteed coverage for over 70pc of the population. The sceptics had their say but eventually with everything turning around for the best in terms of increased coverage everyone seems to be coming around. Yet despite such great strides the Taiwan healthcare plan has its challenges and the government endeavours to address these challenges.

In any case, Private Insurance companies do not provide healthcare services; they contract Hospitals and other care givers to offer services. The NHIF in seeking to implement the new benefits package is entrenching this practice. For a care giver to gain accreditation it must meet a set criteria. Gone are the days when care givers were picked at random without involving the main stakeholders (the consumers).

Now contributors will be required to elect whom they want to be their care giver; a courtesy not available to those covered under private health insurance. The NHIF is embracing courtesy of choice much faster than the free market players advocated for by Miss Patel. It is adopting sound free market trade practices that allow consumers to get what they want. 
 
It must be emphasised that institutional challenges that face the NHIF like for all institutions in the private as well as in the public sectors, should be addressed but blanket condemnation of the fund is unfair. The fund in seeking to implement additional packages is moving a step forward towards conforming to the objectives for which it was set up. Universal healthcare is the fund\’s ultimate objective.

To attain this ultimate objective there is need to have a sustainable pool of resources to ensure that the fund meets its objectives. At the same time we\’ll need to ensure improved efficiency in the management of the fund and that the services for which the fund seeks additional financing are provided.

On the part of the Kenyan people we will need to do some sacrificing for the benefit of the masses. On an economic level the increased contributions as compared to out-of-pocket expenses on healthcare for both the uncovered and covered (with exclusions) citizens is almost negligible. The fund does not discriminate; an individual contributors\’ contribution can cover his entire nuclear family. There are no real caps as is the case under private insurance schemes.

Terminally ill patients are not subjected to further stigmatisation by not being covered or being subjected to different rates. Privatizing the NHIF as advocated by Ms Patel would only serve to turn the fund in to another private enterprise driven by profit and hell bent on exploiting the masses. We owe it to the poor to ensure that the fund exists and helps alleviate their suffering through increased benefits and access.

(The writer is an insurance agent)

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