Health insurance

By Flavia Nassaka

Window dressing without real substance

On May 14, Davis Mujimu Majwega was diagnosed with a type of blood cancer called Acute Lymphocytic Leukemia (ALL).  A few weeks later, the 18 year old was started on treatment.  Since he is insured, his first medical expenses were taken care of – but not for long.  As the bills started to pile up, the insurance company told him he had overshot the limit of his cover. As a result, family and friends took to social media to raise money for his treatment.

Majwega has since been flown to USA for treatment as he awaits a bone marrow transplant.But questions linger about the value of health insurance if it cannot provide cover at the point when it is most needed.

Like Majwega’s family, the financial consequences of surviving a critical illness are something few people are prepared for, including those with health insurance cover.

Most of the insurance plans in Uganda do not cover such critical diseases as cancer, heart and kidney disease, brain tumorsand dementias – even if the sales staff does not say so openly.

Flavia Mpagi, a chartered insurer told the Independent that critical illness insurance is available in Uganda. But just as in most countries in Africa and Asia, it is sold as a stand-alone because it is costly. The big gap between private and public health care also means it is sold as a product that will help people pay for the high expenses of private medical treatment.

In developed countries, critical illness insurance cover involves an insurer paying out a lump sum benefit (money) if the client is diagnosed with a life-threatening illness. The money is tax free and can be used in any way one likes for instance they may use it pay for private medical care or can act as upkeep since at that time the patient or the caregiver may have to give up their jobs.

Mpagi says critical illness insurance lists specific conditions and in great detail explains the stage at which the condition should be before payment can be made. Unfortunately, the diseases are usually described in medical terms that are not easily understood by a non-medical person.

“One insurance company could define a coma as a state of unconsciousness with no response to internal needs for a continuous period of at least 96 hours, and for which period the Glasgow coma score must be 4 or less. No benefits are payable for medically induced comas,” she says adding that changes to the length of time required could make a huge difference in whether one gets paid under the policy or not.

The complexity of critical illness insurance is compounded by the general ignorance about health insurance in Uganda. It is not something many Ugandans appreciate, let alone understand.

Figures from the Uganda HealthCare Federation (UHF), an umbrella advocacy body for private healthcare providers, show that only about 150,000 people in a population of 35 million are privately insured and another 100,000 are covered by community-based health insurance schemes. Many of those on private health insurance are not subscribed as individuals but the companies they work for have initiated them on the plan.

Insurance companies averagely offer premiums between Shs 400,000 and 900,000 per year depending on plan of choice. For this they offer basic items presented in language more complicated to navigate than the menu of a French restaurant in New YorkCity.

One of newer plans looked at for this article offers three options; value, comprehensive, and harmony. Value as expected is bare-bones, that is, semi-private admission, basic maternity, dental and eye-care.  In case of maternity, the mother is covered but not the baby.Comprehensive appears to be more of the same, except it covers the new born baby in case of maternity. It also has higher limits of cover – which means you pay a higher premium. Harmony appears to be the nirvana offers almost the same but an even higher cover.The packages do not cover such treatments as kidney dialysis, spinal surgery, type1 diabetes and regular refills among others.

Safe without critical Illness plans

Dr. Ian Clarke of the International Medical Group (IMG) said all acute and chronic illnesses including type2 diabetes and highblood pressure should be covered. He says, however, insurance companies should not take on a risk which they cannot cover out of the premiums they collect.  To him, this means that the lower the premiums the more they will protect themselves by excluding conditions which could lead to high claims.

Clarke says medical insurance claims can be quite high in Uganda.

“The reason for this is that in Uganda as well as premiums being low there is no co-payment when the patient attends a clinic. This leads to patients going to clinics for trivial reasons and the money which is paid for insurance gets used up for minor conditions.Insurance companies know they will not have the money to cover the more serious conditions.

“All this is wrong and should not be what medical insurance is about, but this is what the Ugandan public wants – they want the window dressing and not the real substance,” he adds.

Grace Kiwanuka, the Director of UHF, says critical illness is difficult to manage, especially with Uganda’s limited infrastructure.

“Most of those who can afford this insurance insist on being flown abroad. So it becomes safer to exclude the conditions and not get into problems with the customer when one cannot export them for care,” she says.

Recall that insurance is not calculated on the costs per individual but is based on pooling the risk. So when you do not fall sick, your money is being used to pay for another person who does fall sick.

Kiwanuka says insurance companies have limits and clauses that help them manage the risk.

She says in turn, consumers have to be astute not to get caught out by those pesky exclusions and waiting periods.  She says by charging highly is the most ethical way to carry out insurance business. But it is bad because it prices out the smaller employer or individual who cannot afford their products much as they may offer good value.

“Cheap isn’t good in insurance,” says Kiwanuka, “unless you have the numbers.”

She says currently the risk pool for health insurance is still small as low risk people are not buying insurance in big numbers. If they were, premiums would go down as scope of cover broadens.

Probably the issue of numbers could be the reason why community based health schemes and corporate plans are picking up a lot of interest.

“Under community one can be charged as low as 30,000 shillings per year and still cover their costs yet mainstream insurance will charge you anywhere upwards to 900,000 and still they are struggling to break even,” she says.

What can be done?

To change this situation, Clarke says, requires a complete shift in the financing of the healthcare system in Uganda. He says government lacks equipment and human resource to run specialized facilities.  As a result it is left to the private sector, but the equipment is very expensive and sometime the expertise to run it is not even in Uganda because the doctors and technicians are working abroad.

“At present those who can afford to pay mostly travel abroad, while the poor don’t get treated. If there was a financing scheme by government to subsidize treatment at any facility within Uganda, this would act as an incentive for private providers to take the risk, cover critical illnesses and set up much specialised facilities,” he says.

He says unfortunately, there is virtually no cooperation between the public and private sector which would have helped to share costs between patient, government, and the insurance company.

But Mpagi says there are improvements that can be made even with the constrained resources. She says standardisation of the critical illness policy should be done by the regulator since people are increasingly suffering from critical diseases.When the policy is in place, the insurance regulator can decide the minimum policy words and coverage for the critical illness policy.

“For instance they can decide the minimum number of conditions that a critical illness policy sold in Uganda should cover.Then insurance companies can go over and beyond what the regulator sets in order to win over more clients or even making it easy to compare and choose the best plan available,” she says.

To make Insurance more meaningful, Clarke says staff on corporate plans need to make co payments when they attend clinics for minor reasons, which would curb the claims for trivial attendances and leave more money for the serious illnesses.

The tougher hurdle, however, remains converting the minds of the public to understand that insurance is savior. Some members of the public actually don’t know what insurance saves. Most of them will ask you what will happen to their money when they don’t fall sick at all.

This attitude is not just about health insurance only. Generally, the insurance sector has failed to grow remaining low at 0.7% penetration.

Mpagi says the peace of mind one gets should be enough.

“You are at peace knowing that if you are diagnosed with a critical illness, you will be able to afford medical treatment. Therefore, whether you get the critical illness or not, you cannot return the peace of mind hence the insurance company will not return your money”.