NHIF, private firms to share civil servants medical scheme

By LUKE ANAMI

Private insurance companies will share the new medical scheme for civil servants with the National Hospital Insurance Fund (NHIF), Association of Kenya Insurers Chief Executive Officer Tom Gichuhi has said.

While NHIF will offer the comprehensive medical cover due to their geographical advantage, private insurance companies will share Group Life Insurance and Last Expense cover for the more than 219,000 civil servants.

"Under the law, NHIF is not allowed to offer both Group Life and Last Expense. They will offload that to private insurance companies. Infact, NHIF has already advertised for it. Commercial insurance companies have, therefore, not lost out on offering insurance," Gichuhi said in an interview with The Standard.

This implies that civil servants will receive a competitive Group Life Insurance and Last Expense insurance covers similar to those offered to other employees in the private sector. Gichuhi said to insure 219,000 civil servants plus one spouse and three children means more than 876,000 new members will be covered, something that has not happened before.

Coverage still low

"Insurance coverage as we know is still low. But for commercial Insurance companies to get a chance to offer Group Life and Last Expense cover to 219,000 plus their spouses and dependants, it’s a plus."

Commenting on why private insurance companies lost the opportunity to NHIF to offer medical cover to civil servants as the Government initially had wanted, Gichuhi said commercial insurance companies lacked the geographical administrative advantage that NHIF has.

"There were arrangements to have commercial insurance companies run the new medical insurance but they lost the opportunity. That could have meant more revenue and more penetration of insurance products.

All is not lost as an insurance cover by any other company, be it NHIF or private is still a plus in ensuring penetration of insurance products in the country," Gichuhi explained.

Confirming AKI’s position, NHIF Chief Operating Officer Richard Kerich said the Fund has already advertised for both Group Life and Last Expense.

"When Insurance companies came to us at first, they had proposed we run the medical scheme but they run the Group Life and Last Expense. The position has not changed. We advertised last week and expect to shortlist a consortium to do so," said Kerich.

Gichuhi decried the low penetration of insurance products in the market saying the new scheme has granted the insurance industry a chance to reach out to populations that had not been covered.

"For a long time, civil servants were paid their medical allowance as part of their income. It was no longer a medical allowance but part of their salary. But to differentiate the product as it has been done now is a plus to the industry."