• To insure against Covid-19 is more challenging than HIV-Aids as there is no specific identifiable behaviour
• There is needed a social approach comprising a concerted effort by all stakeholders to prevent the spread of Covid-19 and meet its expenses or we shall all perish.
Covid-19 has presented challenges in managing medical costs globally.
The suddenness of the pandemic caught hospitals, businesses and governments mid-budget without adequate provisions to fund the unprecedented high medical costs.
To compound matters, millions of households lost their livelihoods due to job loss and business failure following the lockdowns. Hospitals suffered revenue loss as patients shunned them fearing contracting the virus there.
On March 11, WHO declared Covid-19 a pandemic and with this, the fate of the illness as an uninsurable risk was sealed. The tragedy of insurance is that while its business is to carry the risks of others in exchange for a premium, not all risks can be covered. Others are not worth insuring as it cannot be done in an economically feasible manner.
The certainty of the risk meaning claims will definitely occur, high moral hazard, insufficient data and challenges in pricing are issues that insurers grapple with in regards to Covid-19.
To insure against Covid-19 is more challenging than HIV-Aids as there is no specific identifiable behaviour as its cause and its spread is dependent on the general public not necessarily that of the individual. Nevertheless, the Kenyan insurance market must be lauded for speedily putting in place some health insurance cover for its clients.
On November 11, Health CS Mutahi Kagwe said Kenyans will have to pay for Covid-19 expenses on their own in private and public hospitals. Kenya must contend with this.
The insurance industry follows the lead of the government to insure emergent risks. This was the case with HIV-Aids, which it started insuring after concerted government efforts to educate the public on prevention, eradicate stigma and the development of ARVs.
With NHIF pulling out of covering Covid-related expenses, the private insurance industry will have to rethink its position bearing in mind all insurance hospitalisations are paid net of NHIF rebate.
What options does the country have?
There is needed a social approach comprising a concerted effort by all stakeholders to prevent the spread of Covid-19 and meet its expenses or we shall all perish.
Prevention is certainly better than cure but some Kenyans don't believe Covid-19 exists. Aggressive public education at the grassroots is needed to convince the public of the need to wear masks, frequently wash hands and their personal responsibility. The example of politicians is important.
The medical fraternity has its role to play. Medical expenses are unjustifiably high, pharmaceutical companies grossly exaggerate their prices, and doctors, though we appreciate their specialisation, charge astronomical fees.
It is time to normalise expenses charged for the good of the country. Indeed insurers complain of the exorbitant costs by medical service providers, which necessitate increase in insurance premiums. It is cheaper to stay in a five-star hotel in Kenya than spend a night in some hospital rooms.
However, the ultimate responsibility lies with the state.
Insurance defines the state as ‘the insurer of last resort’. This is because the State has under its control all the machinery and power to mobilise and distribute resources, make and enforce laws while its main responsibility is to maintain its sovereignty and welfare of the people.
Therefore, though it is a challenging situation, the government cannot abandon its citizenry nor appear to abdicate its responsibility during this crisis. There is need for urgent redirection of resources to cater for medical expenses for all citizens, review of the purpose of NHIF in national health, increase membership and support all legal means of acquiring a vaccine.
A friendlier Kenya Revenue Authority and further review of the tax regime to ease the burden on entrepreneurs so that they can maintain jobs will help. Almost needless to say, the direction of collected taxes to the correctly designated sectors should inspire Kenyans to pay tax.
Finally, an effective zero tolerance to corruption stance in the country with swift prosecution of perpetrators and repatriation of such funds for their intended use is critical. This is a golden opportunity for the government to redeem itself before Kenyans.
Without these measures, we can only empathise with Kagwe’s silent cry for help on how to manage Covid-19 expenses.
Lucy Njiruh is a fellow of the Chartered Insurance Institute of London and Fellow of the Insurance Institute of Kenya.