The recent order by the Rwanda Social Security Board to restrict RAMA insurance plan subscribers from going to private hospitals unless they are referred by a government hospital has elicited criticism from clients, who say the move is uncalled for.

Those insured under RAMA could incur a heavier cost if they go to private hospitals without a referral, something many have termed unfair because it infringes on their right to decide where to seek treatment.

On April 18, a notice by RSSB indicated that effective May 1, it would no longer cover 85 per cent of the bill that policy holders who go to private clinics or hospitals incur.

The insurer said it would only cover a percentage calculated on the basis of the standard tariff for private clinics.

Many policy holders, mainly government workers, prefer going to private hospitals or polyclinics because of easy access to doctors and quality treatment which most times is lacking in public hospitals.

“We are entitled to choose where to get treatment and this restriction is unfair,” said one RAMA subscriber who spoke to Rwanda Today on condition of anonymity.

The new directive came a few months after the government increased the premiums for RAMA card holders by 25 per cent — a move which also saw premiums for those subscribing to private insurance companies get increased to 15 per cent.

READ: Rwanda employers in panic as govt raises cost of health insurance

Although the Director-General of RSSB, Jonathan Gatera, has come out to say the move is intended to ensure proper management of the fund, health insurance analysts say the issue is more complicated than that.

“Healthcare is very costly and by coming up with a move like this, RSSB is ensuring that the costs are manageable,” said Richard Butare, a health economist and independent consultant for healthcare utilisation.

Escalating costs

He said that for instance a simple ailment like malaria or flu can be treated by a general practitioner in a public hospital, but if it is treated in a private hospital, it ends up costing a lot more.

One of the key concerns by RSSB was that some private hospitals were escalating costs to inflate their claims.

Access to healthcare and other non-medical care in private hospitals has been found to be far better in private hospitals than in public hospitals.

The bill for those who bypass government referrals will be based on the tariff of the private clinics and not the private hospital the card holder has gone to which will ultimately raise their top up.

In a recent meeting, the general assembly of the Rwanda Private Medical Practitioners Association also criticized the directive, saying it would greatly affect both private health facilities and patients.

Currently, the health insurance segment of the insurance sector is struggling, with players saying fraudulent practices, low subscriber volumes, dismal premiums and high claims are resulting in losses.

In a recent interview with Blaise Uhagaze, the executive secretary of Rwanda Health Insurers Association, he said losses attributed to fraud occur when hospitals or clinics file false claims for expensive laboratory tests on a patient.

The net underwriting profit for private insurance companies stood at Rwf15.9 billion at the end of 2013 but fell to Rwf8 billion in 2015 and to a record low of Rwf2.4 billion in September 2016.

According to data from the central bank, total liabilities and equity for the insurance industry were Rwf233.2 billion in December 2013. This increased to Rwf309.4 billion in 2015 and by September 2016 it stood at Rwf345.6 billion.

Unearned premiums have also been increasing. In December 2013, they stood at Rwf13 billion, rising to Rwf15.9 billion in 2015, and Rwf20 billion in September 2016.