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Choosing a medical insurance plan

NAIROBI, September 10 – Many Kenyans hold the perception that medical insurance is expensive. Experts now say most people do not understand how health and medical insurance works.

The primary function of medical insurance is to transfer risk; it shifts the financial consequences of falling ill, and in return, the insured pays a premium.

According to Perminus Wainaina, a financial and investment adviser at Concept Advisory Center, without a cover, an individual is ‘self assuring’, thereby taking the risk of covering medical expenses from their own pocket. He says this decision is mainly borne out of ignorance or limited finances.

Wainaina says contrary to belief insurance premiums actually end up being lower than the total amount for the cover.

Over the years health management organisations (HMOs) as well as insurance companies have introduced medical insurance plans (MIPs) which cater for various classes of people.

Consequently, more people have been fortunate enough to get health cover through schemes operated by their employers. However, there are millions who are not eligible for cover under their employment and who are then forced to arrange their own health cover.

While shopping for an individual or family medical insurance, Elijah Wachira the General Manager of AAR Health Services Limited recommends a thorough assessment of the MIP requirements versus available monetary resources. Insurance shoppers should research on MIP providers’ approachability, experience, products (keeping in mind benefits versus costs) as well as mode of payment, proximity of providers in terms of which hospitals the MIP works with and documentation of policy profile.

It is important for one to consider that an MIP could exclude pre-existing, congenital as well as some chronic conditions. “These can however be included as a supplementary benefit upon payment of additional premium,” Wachira explains.

A good MIP provider is characterised by the product range, areas of operation, good record system for timely and efficient delivery of service as well as insurance and medical professional expertise. Wachira notes that many prospective clients focus on the value of the premium as opposed to the cover benefits. He advises that a good cover must have balance between benefits, limits and exclusions.

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It is also important to determine an MIP’s history with providers as well as its ability to keep patient and member records and advice on preventive measure.

The experts say apart from saving you up to 80% of your money as compared to the high spending of an out-of-pocket medical treatment, a medical cover allows one to have peace of mind. MIPs also have a faster claims process settlement coupled with very low premium versus claim. Health insurance also grants one access to various medical specialists.

Studies have shown that 53 percent of medical bills that are settled out of pocket result from the perception that medical insurance is only for a select few who can afford it.
Wachira notes that the (now dying) harambee culture is also a demerit to the take up of MIPs. “People never prepared for medical costs because, after all, it was a community affair.”

He says MIP providers have continued to devise products that fit the affordability of many segments of clients. HMOs as well as other medical insurance providers have adopted strategies for low premium products, monthly payment option, and premium financing through the help of banks as well as health and nutrition education to manage preventable conditions hence reducing costs of intervention.

“Today medical insurance is quite affordable; prices are driven by the benefits, limits and exclusions. The higher the benefits, freedoms of choice, limits and the lower the exclusions then the higher the price,” Wachira notes.

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