A study conducted by the Insurance Regulatory Authority(IRA) has found out that majority of Ugandans think the premiums they pay for health insurance is high.
"Individual clients noted that premiums were high and therefore not affordable by the majority, even though the services received were reasonable. The study also revealed that 74% of the corporate respondents noted the premiums paid were adequate for the service and 23% noted it was high," Alhaji Kaddunabbi Ibrahim Lubega, the IRA CEO said on Thursday as he released results of a survey on formal medical insurance in the country.
Kaddunabbi said whereas both corporate companies and individual shared similar sentiments on the crucial role played by health insurance, there was a slight difference on how they perceive affordability .
"They all perceive health insurance as an important service but on the issue of affordability, individuals the demand issues and supply value for money sets in. There is competitive demand for school fees and other issues and health insurance comes in at secondary level. Also the law of large numbers comes in here because if you go as an individual, it will be much higher than as going as a corporate company."
The study
According to the study conducted across Kampala, Masaka, Mbarara, Fort Portal, Arua, Gulu, Mbale and Jinja, medical insurance written premiums increased from ssh107.6 billion in 2014 to shs244.98 billion in 2021.
The study also indicates that majority of Ugandans have sufficient knowledge about medical insurance in regards what it covers at 92%, terms and conditions at 88%, claims procedure at 75% and complaints handling procedure at 61%.
Additionally, majority of the clients(97% of corporate companies and 92% of individuals) perceived medical insurance positively and as a very important service.
Demand for medical insurance
The survey found out that corporate clients mainly take medical insurance to cover health emergencies since it enhances staff well-being and improves the health of workers and their family members through access to quality healthcare.
"A motivated and healthy workforce was thus a compelling factor for investment in medical insurance amongst corporates and was key to staff retention," the study indicates.
The study on the other side says that for individuals, the majority benefit highlighted was the ability to meet medical expenses in a more certain way.
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Choice of insurance provider
The survey also found out that the reasons for choosing a particular insurer included easy access to medical service providers and the comprehensiveness of the coverage.
This means that access with ease and convenience and the breadth of coverage are competitive advantages and medical insurance providers should consider them in their market penetration plans.
Challenges
The study highlighted a number of challenges in the health insurance sector including over-charging for medical services by service providers.
To put this into perspective, hospitals charge highly for patients on insurance than those who pay cash and this tends to eat into the would be profits for the insurance companies.
The study also highlighted fraud committed by clients an sometimes through connivance and abuse of insurance policies by clients and service providers which has resulted into high loss ratios.
"The survey shows that health insurance must be prioritized at both individual and family level because no one is sure when they will fall since," Kaddunabbi said.
"As IRA, we are committed to informing policy and market interventions through research. We want to encourage different stakeholders to use these findings to improve their offerings to the market for mutual benefit."
