NHIF on the spot for exposing govt to higher premiums for civil servants
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NHIF on the spot for exposing govt to higher premiums for civil servants, and NYS staff despite advice from the Ministry of Public Service
NHIF on the spot for exposing govt to higher premiums for civil servants, and NYS staff despite advice from the Ministry of Public Service.
In defiance of the Ministry of Public Service, Gender, and Affirmative Action’s guidance, the National Health Insurance Fund (NHIF) floated a tender to provide insurance coverage for 120,047 government servants and National Youth Service (NYS) employees.
The NHIF pushed on a three-month extension, but the ministry wanted to extend the current coverage for another year.
The government may have to pay greater premiums as a result of the choice to publish the contract at a time when the country is having trouble raising money for its operations.
On Tuesday, NHIF placed an advertisement in the media inviting bids for the provision of co-insurance and facultative insurance services for Group Personal Accident (GPA) and Work Injury Benefits Act (Wiba) for civil servants and NYS staff.
The scheme will run from July 1 to June 30, 2024. Prospective bidders are to submit their applications by June 14.
“As you are aware, this State Department wrote to you on the extension of the cover for the next one year,” Public Service Principal Secretary Amos Gathecha wrote in a May 12 letter to NHIF acting CEO Dr Samson Kuhora.
The PS noted that since then, NHIF had insisted on an extension for three months as it prepares to do a more comprehensive contract for one year.
“The IRA [Insurance Regulatory Authority] wrote to us on April 26 and advised that the cover be extended for one year to avoid the government being disadvantaged with higher premiums,” the PS said in the letter.
The letter was copied to Chief of Staff and Head of Public Service Felix Koskei, Cabinet Secretary Aisha Jumwa, and IRA boss Godfrey Kiptum. On February 14, Mr. Kiptum notified then NHIF CEO Peter Kamunyo that IRA had noted the intention to extend the cover for a year and gave him the go-ahead. But NHIF went ahead with the tendering process.
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By June 30, NHIF will owe commercial insurance companies at least Sh6.9 billion, which will increase to more than Sh13.8 billion in insurance premium debt once the advertised scheme rolls out. This will effectively push NHIF’s pending bills to over Sh30 billion, which includes outstanding hospital bills.
Questions are emerging on why NHIF deemed it fit to seek for an open tender insurance cover for its staff but subjected civil servants to a consortium tender.
Its staff were previously on consortium covers.
What NHIF also needs to clarify is why it is seeking for medical cover for its board of directors in the open market, yet it wants to block civil servants and NYS staff from doing the same.
By going to the open market to source an underwriter for its staff, NHIF clearly denies itself the much-needed income required to finance its operations.
NHIF further has its Group Life, Last Expense, Wiba, and GPA insurance provisions open to the market through insurance brokers but wants civil servants and NYS staff catered for by a consortium of five co-insurers, 10 facultative reinsurers, lead co-insurer, and claim administrator.
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