UGANDA SHOULD THINK THROUGH NATIONAL HEALTH INSURANCE SCHEME

It was announced this week that government had given the health ministry the green light to bring a national health insurance bill to parliament.

According to the proposed bill workers will have to fork out five percent of their income and their employers top that up with another five percent.

There was an immediate and loud reaction against the proposal by the workers.

Their protestation revolved around the cost of the new tax on their income. Some arguing and rightly so, that under their private health schemes they pay much less than the government is looking to extract from them...

The argument that as an insurance scheme, which will mobilise the largest pool of insurance funds in the country, the five percent monthly levy on their gross income was extortionist. Especially since they have little faith in the government’s ability to utilize these resources optimally. The government’s corrupt record not helping the cause.

In Kenya they have the National Health Insurance Fund (NHIF) which was started in 1966 as a department in the health ministry until 1998 when it was converted into a state corporation to provide affordable health care for Kenyan adults.

At the highest tier – Kenyans earning more than a monthly Ksh100,000 (sh4m), pay Kshs1,700 or 1.7% of their salary as premium to the fund.

Rwanda has a health insurance scheme where every adult is expected to contribute according to their means, with the highest contribution being about $8 monthly (sh30,000).

National Health Insurance is not a new phenomenon, its traced back to pre-World War I Germany, so one wonders why our planners are looking to gorge out our eyes with their proposals.

No one is against a national health insurance scheme as most formal employees are already beneficiaries of an existing scheme, it’s the rates that are clearly ridiculous and raising suspicions.

As suggested earlier if there are at least two million workers in the formal workers one should expect the premiums on the health insurance to fall drastically compared to what is being paid in the private sector.

One other concern was that given the poor state of government facilities formal workers would have to pay twice or now thrice – incomes are taxed for PAYE, taxed to support national health insurance and employers would still have to subscribe to private providers anyway.

But in countries where the national health insurance has worked membership to it entitles card holders to service in private facilities as well, so those concerns would be put to rest if our health ministry is planning the same.

"If done well this may even serve the purpose of widening the tax base, removing the burden on formally employed workers and even increase the economy’s productivity....

If every adult is supposed to pay at least sh100,000 let’s say, it will force some of those Ludo “champions” crowding trading center verandahs to become gainfully employed in order to pay their health insurance dues.

It would also be wise to take the fund out the health ministry to administered separately.  This may help allay the people’s fears that the funds will be managed by the health ministry. Of course we would expect that the new agency’s administrative costs don’t balloon out of reason. NSSF would be a good model to emulate.

This may also help improve standards in the health sector. A requirement maybe that to qualify for payouts from the fund health facilities need to meet certain basic criteria of infrastructure and staff.

A well run agency can actually be a game changer in improving health standards in this country.

On the other hand it might be the very thing that brings the health sector to its knees. The verification of claims and the pay out of those claims can be a huge source of corruption. They could on one hand connive with health operators to inflate costs and put huge pressures on the fund. On the other hand they may accumulate huge arrears to the sector and fail the health sector altogether. Operators in other industries from logistics to telecommunications to electricity have horror stories to tell about arrears they have had for years with government that go unpaid.

We keep our fingers crossed that it will be the former rather than the latter scenario that plays out.