AAR Insurance has unveiled a post-retirement medical cover for employees aged below 60 years, becoming the third firm to launch such a product in the market.
Dubbed ‘‘Afya Plus Post-retirement Cover’’, it has a limit of between Sh1 million and Sh5 million for inpatient and Sh100,000 to Sh200,000 for outpatient. It is targeting to net the youth early.
The AAR Insurance product was launched in partnership with Octagon, a pension services provider that is also the scheme’s trustee, in Nairobi on Tuesday.
“The product was unveiled because the need has been there for a long time and this is the response,” said AAR Insurance managing director Caroline Munene.
The scheme comes after a similar product by pension fund manager Alexander Forbes (Ngao Milele). Enwealth Financial Services in partnership with APA Insurance and Apollo Asset Management are marketing Anaya Post-Retirement Healthcare Fund launched last year.
Ms Munene said AAR Insurance’s new product would ensure that retirees have peace of mind by freeing them from exhausting their pension benefits on medical bills.
“Traditionally, medical underwriters have not been giving medical cover to individuals above the age of 60. Afya Plus will cover individuals who are above 50 years old,” she said.
“Through this product, retirees will be able to enjoy the benefits that come with a medical cover such as inpatient, outpatient, rescue and evacuation.”
Retirement Benefits Authority (RBA) chief executive Edward Odundo said the regulator was aware of the challenges in the sector and the RBA would work to strengthen the management of the retirement benefits schemes.
“I want to assure you that we shall do anything within our mandate to protect the interests of our members and sponsors of retirement benefit schemes in order to develop and grow the industry,” said Dr Odundo.
Octagon chief executive Fred Waswa said the introduction of regulations on post-retirement medical scheme was a step in the right direction.
“However, more needs to be done to encourage employers to mandatorily augment member’s additional contributions so as to ensure adequacy of the medical savings,” he said.
Last year, the Treasury amended the law to allow workers to start saving for medical insurance cover upon retirement through their employee-backed pension schemes.
This was a major step forward since healthcare expenses remain one of the biggest headaches for households in the country.
A trend analysis report supported by the RBA showed that health expenditure had grown to Sh73.2 billion by 2015, while the percentage of inpatients aged over 65 stood at 34 per cent in 2013 compared to 25 per cent a decade ago.