Some 75 staff of Microcare Health have lost their jobs after the International Medical Group (IMG), the parent company of International Hospital Kampala (IHK), bought out the struggling health insurance provider.

The takeover of Microcare by IHK is expected to be announced in Kampala today, Dr Ian Clarke, the hospital's Chief Executive Officer, confirmed yesterday.

The Uganda Insurance Commission last week suspended Microcare from writing any new insurance business or renewing the existing policies. The High Court on October 22 dismissed an application from Microcare that sought to stop the insurance commission from suspending it from business.

In suspending Microcare, the insurance commission ordered the troubled company to refund premiums from cancelled policies.

Microcare Ltd, which has an estimated 80,000 clients, got into trouble early this year after eight hospitals including Paragon, Bugolobi Nursing Home, Victoria Medical Centre, Sas Clinic, Case Medical Centre and St. Catherine's Children Clinic, that were providing an outpatients service to its clients, sued the health service provider demanding over Shs2 billion in alleged unpaid bills. The hospitals, however, later withdrew the case.

Closed shop

Microcare was licensed in 2004 to provide health insurance to both the formal and informal sectors. But after it was sued by its service providers, the Commission decided to close the health insurance provider in March.

Microcare then challenged the commission's decision in the High Court, but Judge Yorokamu Bamwine on October 22 ruled that the contest from Microcare had no merit.

It's not clear whether IHK will take over all the liabilities of Microcare including the clients who had their policies running.

Dr Clarke said yesterday; "That's true. We have bought out Microcare. We are going to announce the takeover tomorrow (today) at a press conference."

Asked how soon the takeover would be effected, Dr Clarke said IHK has already applied for an insurance license to run the activities of Microcare. "The process should take us about a month," he said.

Demanding arrears

Meanwhile, some of the 75 Microcare staff, whose service has been terminated, are demanding four month salary arrears. In an October 29 letter to terminated staff, Microcare Company Secretary, Ms Rita Namakiika, acknowledged the arrears.

In her letter, Ms Namakiika said the new owners of Microcare had agreed to pay a net salary to the affected staff for the month of October, less any money owed to the company in form of loans and advances.