Health insurance premiums are forecast to rise in Uganda after insurance companies discovered widespread fraud by hospitals and some medical insurance customers.
It is not yet clear by how much the premiums will be increased but several industry players say insurers will seek to transfer costs of fraud and investigations to customers, reported The Independent.
At the start of this month, several insurance companies blacklisted a number of hospitals for having engaged in insurance fraud that is estimated to run into billions of shillings. An investigation was commissioned by the Uganda Insurers Association (UIA).
The fraudulent practices included fictitious claims, treating non-card holders, conducting unnecessary tests, over-prescription of medicine, and using two-tier pricing where cardholders were charged more than patients who paid cash.
Jubilee Insurance was the first firm to notify its customers on 1 November of its terminated contracts with 23 hospitals or medical facilities. UAP Old Mutual has notified 30 hospitals, medical clinics and health centres that contracts were terminated with immediate effect.
However, Dr Mukuzi Muhereza, the secretary-general of the Uganda Medical Association, said that there is no fraud committed by hospitals or any medical facility.
“What they do is to put a markup on their fees. Insurance companies take a very long time to pay. Some take up to six months or one year before clearing the medical bills. Hence, our facilities to put a markup.”
Ms Mariam Nalunkuuma, the Insurance Regulatory Authority (IRA) senior communications manager, said the regulator had been receiving complaints from insurance companies.
“This year alone, we received complaints of fraud cases worth UGX4.9bn and last year it was UGX3bn,” Ms Nalunkuuma said.
According to the 2018 Insurance Regulatory Authority report, medical insurance is one of the fastest growing classes of business in Uganda. Health insurance premiums grew by 26.96% UGX204.05bn ($552m) in 2018 compared to 2017.
UIA says that while fraud affects all business lines in the insurance sector, it has been increasingly prevalent in the medical class of business.