Choosing the best health policy
What you need to know:
- A good health insurance policy would usually cover expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalisation costs and even post-hospitalisation recovery costs to a certain extent.
Health or medical policy is an insurance cover that provides the insured with payment of benefits owing to injury or disease. Ernest Barusya, an actuary at Kenbright Actuarial and Financial Services, says health insurance protects one from the risk of loss of income in payment for medical expenses due to inpatient or outpatient admissions.
Life has uncertainties and it is only prudent that people invest in insurance to be redeemed from the pressures that illnesses bring. Bernice Muhirwa, the wealth manager Stanbic Bank, says just like comprehensive insurance gives a driver peace of mind on and off the road, health insurance gives one peace of mind, even in the event of illnesses.
Essence of medical insurance
These covers are designed to take care of the unfortunate event of costs associated with providing outpatient or inpatient treatment or care of an insured member.
“The real essence of medical insurance can be felt on inpatient care for maternity, accident and illness hospitalisation as well as surgeries. This is because it is in such instances that some sell their property such as land and take loans to service their medical bills. If one has a limited budget for medical insurance, the priority would be to get a cover for inpatient and later outpatient. This is because inpatient cover is more affordable at a ratio of 20:80, in terms of premiums payable,” Barusya explains.
Shopping for insurance
When looking for health insurance, Florence Nabakiibi says you should look for a policy that provides sufficient coverage. In short, it must cover the most common health needs of the policy holder. However, you cannot know who provides a good policy and if the health policy of choice is ideal unless you acquire knowledge.
Muhirwa says information is important when someone is shopping for a health cover.
“You should read about the policy, looking at each clause critically so that you make a well-informed decision. You must find out what exceptions such as age cap, and uninsured diseases there are in the clause. Digging up information will also help you get a better bargain, not forgetting the minimum or maximum premium you must pay and any penalties that may arise in case of defaulting,” she shares.
Barusya adds that clearly understanding what your medical and financial needs are is also important.
“Balancing affordability and coverage is key. That said, you can also choose insurance covers based on the benefits it offers and their respective limits. On the other hand, some focus on geographical coverage of cover, or how spread and big the provider network is,” he says.
He says in proper actuarial pricing of these products, all the above aspects should attract a premium which also increases the cost of medical insurance. As such people are now being advised to focus more on a preventative approach to health risk management and wellness to avoid their costs of medical insurance from going up.
“This is because studies have shown that more than 80 per cent of ailments that form medical insurance claims are acute conditions which can be avoided if people adjusted their lifestyles and took better care of their bodies,” Muhirwa advises.
Coverage
Health insurance coverage varies from person to person based on their needs, circumstances such as age, family size, and level of income, as well as alternatives available.
“For example, older people and those that have pre-existing health conditions may need a wider coverage than those that have no medical conditions,” Nabakiibi shares, adding that the rates will vary from company to company based on the product structure and scope of cover.
Players in the market
Barusya says the industry is dominated by UAP, Jubilee, AAR, and Prudential after acquisition of IAA. On the other hand, high-traffic healthcare providers include AAR, IMCs, Nakasero Hospital, Case Clinic, International Hospital Kampala, UMC Victoria Hospital, Novik Hospital, Kampala Hospital Limited and these take the lion share of insurance claims.
“Community-based health insurance schemes also provide affordable health insurance to organised communities upcountry. It is important to note that there lies opportunities to scale up medical insurance to the larger part of the population, especially the retail and informal sector through affordable products that can be district-based, and hospital-based.
Life vs health insurance
Life insurance pays out a lump sum to your beneficiaries in the case of your premature death. The idea is that the death benefit should be sufficient to replace future income loss, as well as cover expenses and obligations outstanding such as funeral costs, medical expenses, and other debts.
Health insurance, on the other hand, helps pay for medical expenses such as doctor’s visits, hospital stays, medications, tests, and procedures. This helps ensure that people can afford medical care and stay healthy.
