Why NHIF is best placed to offer police medical insurance
An Administration Police Inspector examines one of the youths who turned up to seek jobs in the police service. File
What you need to know:
Police officers sometimes work in the bush far away from hospitals. For this group, outpatient claims will be almost negligible.
Those in urban areas will, however, have higher outpatient claims as access to facilities is easier.
The police medical insurance tender was cancelled due to concerns that a single insurer could not absorb the entire force’s claims.
With the addition of 10,000 recruits, the estimated number of officers would pass the 70,000 mark, perhaps excluding the police reservists who may not fall into the civil servants category.
Including dependants, the eligible number rises to about a quarter a million if the conservative number of two children per family is used. This is not an insignificant number and perhaps raises concerns if a sole firm can handle the claims.
However, a look at the firm that won the tender shows such fears are unfounded. Its healthy balance sheet and rich talent in the actuary department suggests the management had done their math and found the firm capable before tendering.
For those eyeing the next round of tendering, the National Health Insurance Fund’s (NHIF) ongoing scheme should not be ignored. No other insurer has a network as wide as NHIF and all police officers are already enrolled in the scheme. It has all their data and records making administrative cost slightly lower.
In a previous article in this paper last year, I had suggested private schemes target augmenting the NHIF’s civil servants scheme rather than run parallel ones. This would avoid duplication of several processes and also significantly lower the entry costs into the private insurance scheme for civil servants.
While the average cost of a quality combined inpatient and outpatient cover retails at about Sh5,000, this deal still falls short. Perhaps the factoring in of the co-existing NHIF civil servants deal was the reason for the slightly lower priced premiums.
Which brings to question the other peculiar thing: why have two schemes running parallel at the same time?
For the number of anticipated officers, about Sh2 billion would have been the figure. Therefore, cost-cutting and expense saving measures will be needed by whichever team wins the new tender.
At about Sh3,000 per person annually, the NHIF scheme falls short of the market rates. Many providers have been vocal about this, indicating a raise would improve services. However, given that this cost is already paid, the remaining amount for topping up is smaller.
One challenge for insurance consortium bids is always the sharing of risk and profits. Risk stratification in the forces greatly depends on the unit one is attached to and the region one is working in. The latter because of claims costs and variation in cost of access to services. How do they choose who will cover who and where?
Police officers sometimes work in the bush far away from hospitals. For this group, outpatient claims will be almost negligible. Those in urban areas will, however, have higher outpatient claims as access to facilities is easier. Those in areas deemed “battlefronts” will have relatively higher claims.
With the Teachers Service Commission’s Sh1 billion beneficiaries next in line, the success of this first consortium bid will serve as a marking scheme for future ones.
