According to the United Nations (UN), four out of five Kenyans have no access to health insurance. Many poor Kenyan households can’t afford health care services. This situation is exasperated by out-of-pocket payments which shove about one million people into poverty. It’s no wonder majority of the population is excluded from quality health care.
Health Insurance pays for health-related costs incurred by the insured/policyholder. These costs may include outpatient visits, immunizations, surgeries, prescription drugs, and sometimes optical and dental. It’s a way to ensure you and your family get the best medical care without worrying about the cost.
Choosing a health insurance plan is not as straightforward as you may think. There are a lot of policy rules to consider including; (i) in- and out-of-network services, (ii) deductibles, Iii) co-pays, and more. This article looks at health insurance in Kenya, why you should have medical and what to consider when choosing a health insurance plan.
Reasons for getting Insurance
What are the advantages of having health insurance?
1. Financial Stability
If you have ever been in an accident or had children then you are well aware that health care costs have a way of burning a hole through your wallet. Health insurance creates a windbreak for you by covering the costs of an unseen accident as well as routine checkups and outpatient visits.
Children, regardless of whether or not they are sickly, need constant doctor visits especially at the initial stages of their existence. If you and your family have no health insurance, routine checkups and huge medical bills for any treatment can leave you with nothing. It’s important to get a cover for yourself and your family to prevent this.
2. Peace of mind
Very few things are as important is not more important than having peace of mind. This is especially true the older you get. Insurance guarantees that in the event of an unforeseen circumstance, the insurance company will cover the damage. This brings you peace of mind knowing you and your family are cared for in the event of anything.
3. Stress reduction
Imagine a situation whereby your loved one has been hospitalized and instead of staying by their side, you have to;
Argue with your insurance company (or stand in a line at NHIF offices),
Ask your office for advances (on top of taking who knows how many off days)
Start fundraising for medical bill payments, etc.
Health insurance ensures that while dealing with a stressful situation such this, you are saved the hustle of thinking about finances and organizing fundraisers to help out with the bill. You can just focus on helping your loved one get better with the help of the medical staff and the hospital treatments.
What Should You Consider When Selecting A Health Insurance Policy?
In Kenya, a lot of employers offer medical insurance, in one form or another, for their employees. If you are one of the lucky few then you’re in luck. Find out what they cover and create a health savings account to cater for the other costs not covered in the policy. Additionally, most companies allow you to top up the difference from your salary to get a better cover with the same policy. For instance, if your work provided medical has a Kshs. 50,000 outpatient limit and you just had a baby, you could top up Kshs. 10,000 to increase your policy limit to Kshs. 150,000 and the premium will be automatically deducted from your salary, evenly distributed over a year. Just talk to Human Resources and they’ll be able to sort you out.
Entrepreneurs aren’t so lucky, you have to do your research to find out what works from scratch. Your healthcare options and medical needs will be different from anyone else’s. It may make sense to you to take lower premiums with higher out of pocket payments as a single person. Sometimes, paying a higher premium provides better coverage for certain types of care. Think of specialized or pre-existing conditions that require specialized medication, maternity costs, childcare, etc.
Factors that should be taken into consideration when choosing the right health care plan are similar to those of any insurance. They include:
1. Budget
Health insurance is expensive so it’s best to let your wallet lead you in this regard, click here for our budgeting workbook to see how much you can afford to set aside for health care.
2. Family size
Obviously being a single person plays a huge factor in determining your health insurance costs. If you are big on cost-cutting, an NHIF cover alone would leave you protected thus leaving you with more disposable income to invest. This is in contrast to having a family of 6; from paediatrician costs to maternity costs, annual health and wellness check-up.
3. Specialized conditions
Conditions such as diabetes, cancer, and other special and pre-existing health conditions need to weigh heavily in decision making. It’s important to choose a plan that meets your needs and saves you money regardless of the premium costs.
4. Copayments/deductibles
As a general rule of thumb, the cheaper the premium the higher the copay. A lower premium may make sense in the short term but when you have, say 12 yearly visits to the doctor, each costing you Kshs. 2,000 co-pay, that’s Kshs. 24,000 which could have been earning you interest in a short term investment. And frankly is more expensive than just paying for the higher premium.
Comparison of Select Health Insurance Plans in Kenya
For a 30-year-old with 1 spouse and 2 children with a 50,000 outpatient limit and Kshs. 1,000,000 inpatient limit, the medical insurance premiums costs average at Kshs. 84,301 per year. *this is excluding NHIF
*AAR policy covers Kshs. 1,000,000 for illnesses and Kshs. 2,000,000 for Accident & maternity
For a single adult with a 50,000 outpatient limit and Kshs. 500,000 inpatient limit, the medical insurance premiums costs average at Kshs. 25,500 per year. *this is excluding NHIF
Regardless of your current situation, this should give you a better idea of the costs behind different plans leaving you in a better position to make a more informed decision that’s best for your family’s health care and your wallet
Conclusion
As part of financial planning, Insurance plays a key role in safeguarding the future of yourself and your family. It’s important to save you from a financial crisis from an unforeseen event. Nevertheless, buying insurance should be determined by (i) Your requirement, (ii) Benefits from the specific policy, and (iii) Your ability to pay the premium.
Comentarios