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.
