Rising inflation increases the cost of private health insurance
The astronomical rise in inflation in recent times is having a negative impact on the cost of private health insurance in the country, said Acacia Health Insurance CEO Dr. Dan Armooh.
Consumer inflation rose rapidly to 23.6% in April, the highest since 2004, from 19.4% in March this year,
He said private health insurance providers have been forced to adjust rates every time inflation rises, a phenomenon that hampers industry growth.
“This year the cost of an average health plan is at least GH¢1,800 compared to an average of GH¢1,400 last year. The impact of rising inflation is huge on the industry. For example, service providers (hospitals) buy drugs at a certain price today, and the next day the price increases.
“Despite regular price increases, these hospitals do not review contracts with insurers on the previously agreed amount. They tend to work with new drug prices on the market,” Dr. Armooh revealed.
The situation, he said, is having a huge impact not just on Acacia but on all private health insurers, adding, “It’s okay if the price increases happen once in a while – but the frequent increases may lead to the closure of some private health insurers. ”
Dr Armooh, who was speaking to the B&FT at a seminar on the private health industry organized by Enterprise Group, however said that despite current challenges, the outlook for private health insurance and financing is still huge.
Indeed, the 14 private health insurance companies in Ghana currently only have a total of 300,000 customers.
But Dr Armooh lamented the current arrangement whereby the national health insurance scheme owns a portion of all health insurance business due to the scheme’s mandate to enroll all Ghanaians.
“Until the NHIS reduces its services and hands some of them over to private sector operators, private health insurers will continue to suffer,” he said.
Acacia Health Insurance, a member of the Enterprise group, despite the difficulties encountered by the industry, performed well.
He said the company’s capital adequacy ratio stood at 167%, well above the regulatory threshold of 150%.
“Although the minimum capital requirement for private health insurance scheme actors is GH¢5.4 million, Acacia Health Insurance Limited has declared capital of GH¢18.6 million,” he said. declared.
He explained that the company currently serves more than 34,000 customers across the country, noting that: “Our vision over the next three years is to grow our membership to 60,000 – and the long-term priority is to reach 100,000 members,” he added. mentioned.