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Health Insurance can we solve the Puzzle.

Feb 2013:


Twice, the government has attempted to launch a compulsory health insurance scheme. Carol Natukunda weighs the cons and pros of the proposed scheme.

Last week, the health minister in charge of general duties Sarah Kataike Ndoboli raised the contentious health insurance debate again. She said Uganda needs to introduce the scheme in order to improve its health services. 

The plan to have a national insurance scheme started as early as 2006. The scheme was supposed to be rolled out by July 2007, but due to an uproar from the public, it was halted. In 2009, the plan again flopped as sections of employees protested the move.

According to the plan, employed Ugandans would have to contribute 8% of their monthly earnings to the scheme – 4% from the employer and another 4% from the employee.

The scheme would be administered through a parastal body – the Uganda Health Insurance Corporation with a mandate to collect the compulsory contributions from workers – just like the National Social security Fund (NSSF) collects money meant for our retirement.

Can we learn from the private providers? Is it a raw deal?

The success of any insurance scheme depends on affordability. There is evidence from the private organizations that are already doing it that health insurance is way too expensive for the ordinary Ugandan without a stable income.

A 2008 report titled Private pre-paid medical payment and insurance schemes in Uganda: What can the proposed policy learn from them? the authors Charlotte Zikusooka and Rosette Komuhangi of the Human Development Capital Consult found that at one company, the rates were between

US$400- $3,000 per person per year.

The fee was for “patient hospitalization” for senior executives and high net-worth individuals, including evacuation services.  Only about 20 people were found to have this type of insurance. 

The insured people usually obtain health services from providers outside Uganda (mainly in South Africa), although they might sometimes require some initial care (for stabilisation) with providers in Uganda.

According to the report, most of the clinic were found to charge between sh200,000 to sh5,000,000 per person per year, depending on the type of cover one had signed up for. 

These calculations at the time were based on an exchange rate of between sh1,785, which implies that the cost could be more currently. 

The pre-payment categories also vary depending on the specific clients – whether you are an individual or the corporate company.

While no payments are charged to insured patients, the authors caution that patients may pay “a penalty” if they fail to comply with some of the regulations/conditions in their contracts. Normally, this “penalty’ will be about 20% the total cost of the treatment. 

One doctor confirms: “if you covered for your malaria, and we treat you for a completely different thing, then you are charged more money.”

It is difficult to establish the validity of the information on contributions obtained from employees, especially in light of the fact that most of their premiums are paid in full by their employers. 

But some people claim that they do not get the service they deserve and they are afraid that the hospitals might be frugal with their medicines in order to make maximum profit.

One mother of four confides about the time her daughter was down with malaria and she was prescribed an under dose.

“Fortunately, I knew what a full dose of coartem should be. I protested, the doctor told me to go and come back if my daughter doesn’t improve. I insisted and that is when she gave me the full dose,” she says. 

Due to the sensitive nature of this kind of information, Sunday Vision was unable to independently verify this. Most of the insurers are also not willing to disclose their contribution rates or premiums per member/dependent, so this gap remains.

The common ground

Minister Kataike is hopeful that despite the sentiments, health insurance is the way to go and needs to be promoted as much as possible. “I think we have not marketed well that information to our people. We need to explain everything, allow them to ask as much as possible,” she says.

She argues that Rwanda had introduced health insurance and the programme is working well. 

“In Rwanda, people were sensitized and they contributed money some of which is being used to pay health workers. This could be the reason why Uganda health workers were migrating to Rwanda for greener pastures.

“Rwanda is a small population. If they can mobilize their people and they contribute money, we in Uganda needed to give the people a right message which can help us as a country,” says Kataike.

Both the 1999 National Health Policy  and the 1995 constitution obliges the Government to take practical measures to ensure the provision of basic medical services to the population.

According to Kataike, this would help to diversify and strengthen health care financing hence ensuring good quality, accessible and affordable service.

Trade unions and employers speak out

Usher Wilson Owere, the chairman of the Uganda Trade Unions says Ugandan workers are already burdened by the taxes.  

In addition to the Pay as You Earn and the Local Service tax, the law mandates all workers to pay 5% of their income to the Fund, while the employer contributes an additional 10%. Owere says NSSF has the largest pool of savings the government can ever boast of.  In fact, he wonders why the NSSF should not consider savings to help with the health insurance plan.

“If they make some profit, then they should use the money for our health or housing benefits. Most workers already have good savings with them,” says Owere.

To this regard, Owere says the government would then make a deliberate policy to raise funds for health insurance for the common unemployed man.

“We should have our own scheme which is provided for by our savings in the NSSF,” he says.

With the money scams that have recently rocked the public sector, critics also express mistrust of the proposed scheme. 

“How sure are we that this money is not going to end up in someone’s personal pocket? It is becoming clear that people want to steal public funds every day,” says Sam Lyomoki, the workers’ legislator, adding that the NSSF has also been rocked in scandals in the past.

A source at the Uganda Employers federation says while there is need for a comprehensive public health insurance scheme, the paradox is how it should be implemented.

“Look at the private sector. The employers are doing it on voluntary basis, but some of their employees are still not happy with the service,’ a source says. “The key issue is to explain service delivery clearly. You want my 4% but where is it going? Will I be assured of a doctor anytime I fall sick?”



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