NHIF faces financial dent as police leads agency exits

The Interior ministry has launched the search for private medical insurers to cover police and prison officers in a move set to deny the National Hospital Insurance Fund (NHIF) annual premiums worth Sh5 billion.

The heavy task of covering the 131,151 officers will now fall on the shoulders of a consortium consisting of up to three insurance firms, the National Police Service says in tender documents.

The lucrative tender is set to run for a renewable term of two years and three months.

“The comprehensive medical insurance cover has been designed to provide in-patient, outpatient and additional benefits as provided in the detailed scope of the cover,” says the National Police Service in the bid documents published on its website.

Under the cover, each officer will have a spouse and up to five children aged between zero and 25 years covered.

The move by the National Police Service to put its officers under a new health scheme comes barely a few weeks after the Treasury barred the NHIF from providing commercial insurance services.

Treasury Cabinet Secretary Ukur Yatani in December directed NHIF to either drop commercial insurance services or abide by Section 19 of the Insurance Act that would put it under tehe Insurance Regulatory Authority (IRA).

Among other things, the IRA monitors service providers for financial soundness and ability to honour claims.

Police officers have over the years formed an important cog of NHIF’s special medical schemes from which it collected Sh12.7 billion worth of premium in 2017/2018, audited report shows.

The exit of the government agencies is set to dent the financials of the NHIF even as the State hinges its hopes on it to support its universal health push.

At least 40 parastatals and 15 State-controlled agencies, from which the NHIF has been collecting more than Sh1.9 billion per year in premiums, are set to follow suit.

That will leave the NHIF to rely on contribution from members that stood at Sh32.9 billion in the financial year to June 2018 as compared to Sh29.8 billion the previous financial year.

The National Police Service says firms interested in the tender must execute a bid security of Sh100 million in form of bank guarantee.

It also wants bidders to submit a performance security guarantee of 10 percent of contract sum before the contract is signed. The tender is set to close on February 12.