National Health Insurance Scheme will save many lives

Thursday August 8 2019


By Kaddunabbi Ibrahim Lubega

The Cabinet’s decision to approve the long-awaited National Health Insurance Scheme (NHIS) Bill, that will enable Uganda realise universal healthcare, is a welcome move.

The Bill aims at improving the provision of accessible, affordable acceptable and quality healthcare services to all Ugandans irrespective of their age, economic, health and social status.

The Bill also aims at developing health insurance as a complementary mechanism of healthcare financing and ensuring efficiency in healthcare services.

With about 43 million people, Uganda is still struggling to build a healthcare system that can effectively deliver quality services yet overburdened with shortage of hospitals, doctors and related affordable health service provision.

If passed into law, the National Health Insurance Scheme Bill proposes that individuals above the age of 18 years shall be required to remit a certain amount of money to the scheme and acquire an insurance card which shall be used to access health services.

This is a very welcome move by government to minimise the out-of pocket expenditures by the local population while seeking medical treatment. The Ministry of Health has estimated Out-of-pocket expenditure to be above 10 per cent of the total household income, which is considered catastrophic (impoverishing to both the rich and poor).


The setting up of the scheme will, therefore, reduce on people’s movements in search of money to meet medical bills, making the population spend less time in accessing medical treatment such that there is maximum utilisation of the labour force at all times thus maximise productivity.
However, the proposals therein need to address certain issues, especially where the amount of contribution lies with the employee and employer. The Scheme still has two schools of thoughts: One is that civil servants and or formally employed Ugandans shall contribute 4 per cent of their gross pay and the employers topping up with 4 per cent to make 8 per cent as monthly contribution.

Another school of thought is that 4 per cent shall be deducted from the wage or salary of the employee and the employer contributing 1 per cent totaling 5 per cent monthly contribution. Both thoughts are proposing a 4 per cent contribution by the employee, which must be supported by actuarial studies. Whatever decision is to be made, it is important that this is insurance and, therefore, the input of insurance experts like from Insurance Regulatory Authority of Uganda, is paramount and consultations must be supported by actuarial valuations.

Important to note is that there should not be an oversight on how the scheme shall be managed or handled. It should be appreciated that the NHIS, is intended to supplement government’s effort in the provision of healthcare to its citizenry, but not to substitute it. Our East African partner states (Kenya, Tanzania and Rwanda) are picking lessons from Ghana and Nigeria where the scheme is a successful story. For example, in Kenya, the National Health Insurance Fund (NHIF), has more than 6.5 million contributors out of the country’s 48 million people. The scheme in Kenya is mandatory for all the workers in the formal sector contributing through their employers, who make the monthly deductions. However, employers have the liberty to purchase medical insurance for their staff from private insurance firms.

Self-employed citizens are encouraged to voluntarily join the scheme, with a monthly contribution of Shs17, 000 per month (KShs500) or Shs220, 000 per annum (KShs6,000). This covers the entire family, including father, mother and all the children below 18 years and have liberty to access both in-patient, outpatient and delivery.

The beneficiaries also have the privilege to choose the hospital of their choice – public and private health providers.

For those in formal employment, employers make deductions from their pay and remit it to the scheme and this varies depending on the employment scale. If this is the model chosen for Uganda, for instance, employees earning less than Shs250,000 will pay only Shs5,000 per month and those whose gross monthly salary stands at Shs500,000, they would pay Shs20,000 per month. This with an ordinary person would be affordable for as long as the services are also made available.

In Tanzania, although it was initially meant to cover only public-sector workers, the scheme opened its doors to voluntary contributors to enable them meet their healthcare services cheaply.
The public-sector workers pay 3 per cent of their monthly salaries as mandatory contributions to the National Health Insurance Fund and the State pays an additional 3 per cent on their behalf as their employer. However, unlike in Kenya, enrolment into Tanzania’s NHIF covers the main contributor, his or her partner/spouse, and no more than four dependents/children below 18 years of age.

If the NHIS Bill is carefully examined and passed into law as we strive for universal health care in Uganda, it will boost our hospital infrastructure, human and financial resources. This will inevitably build confidence in the health system and achieve our health vision 2040 of a healthy and productive population that contributes to socio-economic growth and national development.

From the regulators perspective, it has been such initiatives that have boosted our counterparts’ health insurance coverage with Tanzania standing at 16 per cent and Kenya at 10 per cent.

Mr Lubega is the chief executive officer, Insurance Regulatory Authority of Uganda.