Partnership seeks to prove there’s profit in insuring the poor

Kenya: For a long time, most people in the country’s lower economic quintile have been covered by — as Christians would put it — the blood of Jesus.

For a lucky few, the National Hospital Insurance Fund (NHIF), which charges a minimum monthly premium of Sh30 for low-income earners, provides some form of security.

Very few others are covered by private health insurance schemes. It is not that the poor are despised by private insurers; but the risk involved in insuring them is often termed “too big”.

To protect themselves from the risks, health insurance providers have generally charged exorbitant premiums, making medical insurance inaccessible to a majority of Kenyans.

But now, four organisations have teamed up and designed a health insurance product that targets the poor and access quality healthcare, and they are convinced it is paying off already.

The Afya Kamili health insurance policy is a partnership of Unaitas Sacco (in charge of membership and distribution), Genius Health (in charge of technical support), UAP Insurance (in charge of underwriting) and NHIF.

Huge gap

The product is intended to enable people in the informal sector access affordable healthcare in mission and Government hospitals.

According to Unaitas officials we spoke to, since the product’s launch four months ago, it has received 35,000 applications.

Currently, only about seven million Kenyans have some form of health insurance. This leaves 33 million Kenyans exposed to the heavy social and economic burden of illness.

“The huge gap is really the elephant in the room in health insurance,” said Peter Waweru, the CEO of Genius Health.

In his opinion, a large part of the problem has been the way insurance providers have distributed their products.

“Afya Kamili uses mobile technology, which is trusted and is everywhere, thus lowering the costs of distribution and making the product more affordable and accessible,” said Mr Waweru.

The product also rides on the credibility the Unaitas brand has in low-income areas.

“Unaitas is a brand people have come to know and have tested over the years. Now, it is just Unaitas delivering one more product,” said Waweru.

The financial services firm has close to 20 branches in the counties, and a membership of about 200,000.

“In Kenya, healthcare is mainly financed through out-of-pocket expenses, putting a huge burden on households,” notes Unaitas. “Harambees are the main avenue of funding healthcare expenses. This leaves the whole community poorer and in a debt trap. No sustainable development can happen in these circumstances.”

Disease exclusions

To appeal to a target market that can be rather wary about health insurance, Afya Kamili comes with a number of riders.

For instance, spouses get Sh100,000 in last expenses should the principal member die. He or she also receives Sh100,000 in case of a permanent disability arising from a personal accident.

It also has no disease exclusions, age limit and covers 100 per cent of inpatient bills.

Under Afya Kamili, a member pays a minimum premium of Sh4,000 for inpatient cover per year.

Outpatient cover is fund managed, where instead of a member paying a premium, he or she saves a minimum of Sh350 a month for one year. The money that is not utilised is rolled over to the following year.

The product also allows members to borrow against the money they have saved for outpatient cover.

“The product is bringing banking and insurance closer because that is the future. We are demonstrating you can have a one-stop shop where you have banking and insurance together,” said Tony Mwangi, the CEO of Unaitas.

He added that the product is one of the ways in which private firms are complementing Government efforts to provide universal health coverage. A member who gets into Afya Kamili is signed into NHIF.