Mandatory Health Insurance in Uganda
State Minister for Primary Health Care, Dr. Richard Nduhura.

Mandatory Health Insurance in Uganda


Health insurance to be compulsory in Uganda. What do you think?

By Gerald Rulekere
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First published: October 13, 2006


Despite opposition from several stakeholders, the government of Uganda insists it is going ahead with the health insurance scheme that is expected to take off in July 2007.

The cabinet has already approved the National Hospital Insurance Fund (NHIF) that will make it compulsory for all workers to pay health insurance to the fund.

The Minister for Primary Health Care, Dr. Richard Nduhura says that the scheme is intended to improve health care and health service delivery to citizens of Uganda. He says that the law on the NHIF is underway and the scheme will start next year as planned.

The scheme is expected to circumvent workers against any future health related expenses. According to the draft plan, every employer will be required to contribute 4 percent of every employee's gross salary to NHIF as health insurance, while the other 4 percent will be deducted from the employee's salary. Government expects to raise billions of shillings from the scheme as well as improved health care through a shared risk policy.

"Using the 2001 survey, our formal sector has over 400,000 employees," says Dr. Francis Runumi, the Commissioner for Health Planning at the Health Ministry. He says the compulsory scheme will start with employees in the formal sector and extend to cover informal sector workers after 15 years. The informal sector employs the majority of Ugandans.

But the business fraternity has expressed strong reservations over the proposed National Social Health Insurance Scheme (NSHIS). Businessmen say that the scheme while good, it will increase the already high cost of doing business in Uganda.

Gideon Badagawa, the Director of Policy Advocacy at the Uganda Private Sector Foundation, which advocates for business owners' interests, says many businessmen are opposed to the health insurance scheme because it burdens the private sector more.

"Our stand is clear: the government's proposal to introduce a National Health Insurance Scheme is not welcome. The move will be an additional cost yet we are already suffering from endless power crisis in the country," he says. Employers are already required by law to pay a value of 15% equivalent of each employee's gross salary to the National Social Security Fund (NSSF) as pension for their workers, while 5% of every employees gross monthly salary is deducted as social security saving to be deposited with NSSF.

But the businessmen are not just concerned about the impact of increasing the cost if doing business through the additional 4% they have to pay, but the income reduction effect it will have on their workers, and the consumers in general.

"As stakeholders, we note that if this scheme is implemented, it will negatively impact on the purchasing power of the more than 200,000 people who already contribute 5 per cent of their salaries to NSSF. Our people are not ready to service this scheme," Badagawa emphasizes.

Bruno Pajobo, an MP for Workers has vowed to block the proposed law when it comes to Parliament. He says the scheme will badly hit workers by reducing the already small disposable income (income available for them to spend).

Lyelmoi Ongaba, the Secretary General of the National Organisation of Trade Unions agrees with Pajobo. He says that the health insurance scheme will reduce workers' income by another 4 per cent, yet many workers have long been complaining of being poorly paid.

"It is common knowledge that with the implementation of this scheme, the National Social Security Fund will leave workers with meager disposable income, thus bringing more misery," Ongaba said, adding that there is no guarantee that the government will offer a good service to the contributors to the scheme.

Another Worker's MP, Sam Lyomoki says government has not done enough sensitization on the proposed scheme and many would be beneficiaries are looking at it as a scheme that will negatively affect their livelihood.

Amid all this is the concern on whether the scheme will really work for the benefit of the people that will register for it, or it will be the usual pain that many people suffer to get treatment in national hospitals, even at Mulago national referral hospital.

There have also been strong concerns over the NSSF monopoly. James Mulwana, a leading businessman and chairman of the Uganda Private Sector Foundation says they want the pension sector to be liberalized so that some companies can receive and manage workers' social security savings in order to achieve more efficiency in the sector. Many people have been complaining over NSSF's delays in payment of claims, as well as putting a lot of burden on the workers and their employers since it is a monopoly.

The government seems to have heard these concerns and is ensuring that the proposed national Social Health scheme is taken over by many health care operators (hospitals).

According to Runumi, the government will use the existing hospitals to start the scheme.

"We shall only oversee the implementation and we hope to work with the existing private health service providers to carry out awareness of the new scheme before its implementation," he told Journalists in Kampala recently.

Many hospitals in Uganda are already bracing up to exploit the opportunities presented by the health insurance scheme, but opposition to government's health insurance plan will have them waiting a little longer unless they help government improve the scheme. Apparently, the health insurance scheme is very popular in neighboring Kenya.

Kenya has already launched a comprehensive healthcare scheme with over a million people expected to start accessing in-patient treatment for all ailments, including HIV/AIDS in 380 health facilities without paying a cent.

According to reports, about 380 hospitals in Kenya have been contracted by the National Hospital Insurance Fund (NHIF) to offer the comprehensive healthcare scheme that was first announced in June. The cover, which will include the cost of drugs for the period of admission for up to six months, but it will exclude bills incurred in the private wings of member hospitals.

As the Uganda government plans to move in the same direction, several milestones will have to be overcome, unless the government is ready to risk the bruises the now unpopular scheme will inflict on it from the ever-complaining workers.

Insurance is encouraged to be part of any financial plan, and there are different insurance policies to cater for different needs. There are currently several life insurance policies offered by insurance companies.

But the limited knowledge and thus appreciation of insurance issues by the majority of Ugandans may be playing the role of leading stumbling block to the national health insurance scheme. Many people need to be convinced that health insurance will help to pay their medical bills, and give them time to concentrate on other beneficial activities.

Otherwise, few Ugandans know that there is such a thing as insurance, leave alone the particulars like the presence of Term life insurance providing for death benefits, disability insurance providing continuing income should one become unable to work or Car and home insurance that provides protection against accidents and damage to cars or residences.

Currently, some employers have health insurance schemes for their employees in private hospitals, but the idea of forced health insurance seems unacceptable to many employers and employees, despite the unmistakable damages businesses and individuals suffer in treatment of diseases they or members of their families suffer

By Gerald Rulekere
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First published: October 13, 2006
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Gerald Rulekere is a Journalist and member of Ultimate Media Consult. He has written and published extensively on business and gender issues and been writing for Ultimate Media Consult (U) Ltd for the last two years. A professional and graduate journalist, Rulekere is always looking for an opportunity to better his writing especially for international media.