Weak shilling could adversely affect medical insurance premiums

A free medical camp. Medical insurance premiums could rise if the Kenyan shilling continues to weaken against the US dollar. PHOTO | CHRIS OJOW | NATION MEDIA GROUP

What you need to know:

  • AON Associate General Manager Irene Chesire Kertich cautioned that premiums may go up, to the detriment of insurance service providers.
  • There is a need to move fast in terms of ensuring that we manage these costs and also price it properly, she said.
  • Other factors affecting the cost of premiums include increased cases of fraud.
  • She revealed that the cases went up in the last quarter, with 20 cases being reported.

A medical insurance expert has warned that medical insurance premiums could increase if the local currency continues to weaken against the US dollar.

Speaking during a wellness programme for human resource officials, AON Associate General Manager Irene Chesire Kertich cautioned that premiums may go up, to the detriment of insurance service providers, companies and individual insurance holders.

The current exchange rate is Sh91 to the US dollar.

“The situation is a bit (shaky) and something needs to urgently happen because the premiums will be too high for clients to pay.

“Clients may opt to pay it as a benefit to the employees. As a result there is a threat to sustainability of the medical insurance packages and medical insurance practice.

"There is (a) need to move fast in terms of ensuring that we manage these costs and also price it properly," Ms Kertich said.

This is in addition to other factors that influence premium rates.

“Medical schemes have been designed to address the curative part of health.

"We have seen many members going to the hospital and that directly affects the premiums,” she explained.

INCREASED FRAUD CASES

Other factors affecting the cost of premiums include increased cases of fraud.

She revealed that the cases went up in the last quarter, with 20 cases being reported.

“We are having a lot of impersonation and collusions within the market and members need to be empowered on how to safeguard their benefits in order to manage the premium costs.

"Wellness is the way to go in terms of managing premium rates and increase in the market,” said Ms Kertich.

Many people are tempted to defraud the scheme she said.

“Insurance talks to the sick people and there is a moral hazard because if someone does not use the benefits from the medical insurance because of being unwell, they are tempted to defraud the scheme so as to benefit,” she said.

She urged service providers to report the cases to the relevant authorities.

“We have cases in court and have suspended some workers as we continue to educate clients on the need to highlight the cases because at the end of the day they will spend money on these fraud cases,” she said.

The other way to tame high costs of premiums is attending to the well-being of the people so as to help them avoid going to the hospital and to decrease the uptake of the medical insurance in a bid to lower premiums, she said.

“We started pricing for medical insurance on the wrong footing. We just need to ensure that there is sustainability by putting measures which include initiating wellness programmes and engaging the employees,” she said.