Kenya to compel foreigners to buy local health cover

All visitors to Kenya will be compelled to buy a local health insurance cover in the country, irrespective of the duration of their stay, creating a new cash cow for the insurance industry from the more than 1.5 million foreigners who arrive annually.

The National Assembly Health committee, which is reviewing the Social Health Insurance Bill, 2023, has proposed an amendment making it mandatory for all foreigners who visit Kenya to have a travel health insurance.

“A person who is a non-Kenyan and intends to enter the territory of Kenya for a period of less than 12 months shall be required to be in possession of a travel health insurance cover designated by the Cabinet Secretary (for Health),” the committee says in the report tabled in the House last week.

The Bill expected to be passed by Parliament this week promises to boost the entity that will replace the National Health Insurance Fund (NHIF).

The public health insurer will be one of the biggest beneficiaries of the new amendment alongside any other approved private insurance firms.

The proposal to have foreigners buy travel health insurance cover is the latest attempt to strengthen the financial muscle of the new NHIF ahead of the official launch of universal health coverage (UHC) by President William Ruto in coming weeks.

The move meant to ensure that visitors are covered for emergencies such as pandemics will significantly boost the cash flows of the new Social Health Insurance Fund and is expected to hand Kenya’s insurance industry a new revenue stream.

The proposal is a departure from the earlier clause in the Bill that sought to make membership compulsory only to foreigners who stay in the country for more than a year.

Travel health insurance protects one in the event of an illness or injury when travelling outside of his or her home country.

If adopted, the requirement will see Kenya join countries such as those in the Schengen zone that compel all visitors to enlist for a national health insurance cover.

Schengen countries such as France, Germany, Austria, Belgium, Czech Republic, Croatia, and Denmark deny entry to visitors without a travel health insurance.

Read: Is travel insurance actually worth buying?

The Bill does not, however, spell out the penalties for failure to enlist and contribute to the national health insurance fund. Kenya received 1.48 million visitors last year, a majority of them tourists.

Besides paying bills, the new insurance scheme will also pay for treatment of chronic illnesses.

National Assembly Health committee chairman Robert Pukose, who is also the Endebess MP, told the Business Daily that the Cabinet Secretary may not necessarily force all travellers to buy the insurance from the entity that will replace the current NHIF, but a private insurer that is recognised in Kenya.

“This requirement has not been there before and now we are making it compulsory like it happens when you go to other countries,” Mr Pukose said in a phone interview.

The Social Health Insurance Bill, 2023 is one of the four State-sanctioned health Bills that have been approved by the parliamentary health committee and are expected to be adopted by the House this month before being assented into law by President William Ruto.

The others are Primary Healthcare Bill, 2023, Digital Health Bill, 2023 and the Facility Improvement Financing Bill, 2023.

Mr Pukose said he was confident that Parliament would pass all the Bills related to social health insurance this week.

“The four Bills will be passed by Parliament between Wednesday and Thursday and we expect that President Ruto will sign them into law this week,” Mr Pukose said.

Compulsory contributions from foreigners alongside those of all Kenyans aged 18 years and above will cushion the yet to be formed Fund against the kind of cash crunch its predecessor, the NHIF, has been struggling with.

If the Bills are passed, all Kenyan adults will also be forced to join and contribute to the new social health fund, with those without proof of updated contributions locked out of government services.

The NHIF has been struggling to pay hospitals despite increased collections from members amid a spike in claims and also fraud that bleeds it billions of shillings every year.

It collected Sh80.43 billion in premiums for the year ended June 2022 while claims hit Sh71.34 billion. In May this year, hospitals started turning away patients seeking treatment on the NHIF cover over unpaid claims of at least Sh12 billion.

The hospitals claimed that the arrears have been accumulating since last year, prompting their decision in a bid to unlock payment from the NHIF.

Besides footing health bills for all Kenyan adults, the new insurance scheme will also pay for treatment of chronic illnesses like cancer and kidney dialysis, setting the stage for increased funding needs.

The Bills are the latest changes to the NHIF Act as Dr Ruto picks up from his predecessor, Uhuru Kenyatta in the race to ensure roll-out of universal healthcare.

The NHIF Act (1998) was amended and passed in Parliament on December 21, 2021 and assented into law on January 10, 2022.

Also read: Britam launches travel insurance for up-country buses

The insurance industry has been grappling with rising claims that continue to threaten their balance sheets. Latest data from the insurance regulator, Insurance Regulatory Authority (IRA), shows that claims paid increased by 19.6 percent to Sh20.15 billion in the first three months of this year rose compared with Sh16.85 billion paid earlier.

Premiums collected rose by 15.9 percent to Sh62.52 billion, being a slower pace than that of the growth in claims paid out.

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