The astronomical rise of inflation in recent times is negatively impacting the cost of private health insurance in the country, CEO of Acacia Health Insurance Dr. Dan Armooh has said.
Consumer inflation rapidly hiked to 23.6 percent in April, the highest since 2004, from 19.4 percent in March this year,
He said private health insurance providers have been forced to adjust rates each time inflation rises, a phenomenon that is thwarting growth of the industry.
“This year, the cost of an average health plan is going for at least GH¢1,800 as against the average of GH¢1,400 last year. The impact of inflation hike is huge on the industry. For instance, service providers (hospitals) buy medication at a certain rate today, and by the next day the price goes up.
“Despite the regular price increases, these hospitals don’t review contracts with insurers on the previously agreed amount. They tend to work with the new prices of medication on the market,” Dr. Armooh disclosed.
The situation, he said, has huge impact not only on Acacia but all private health insurers, adding: “It is acceptable if the price hikes are once in a long while – but the frequent increases may cause some private health insurers to close down.”
Dr. Armooh, who was speaking to the B&FT at a seminar on the private health industry hosted by Enterprise Group, however said despite the current challenges, prospects for private health insurance and financing are still huge.
Indeed, all the 14 private health insurance companies in Ghana currently have a total of just 300,000 customers.
But Dr. Armooh lamented the current arrangement whereby the National Health Insurance Scheme has a chunk of all health insurance business due to the scheme’s mandate to enrol all Ghanaians.
“Until the NHIS shrinks its services and cedes some of them to private sector operators, the private health insurance companies will continue to suffer,” he said.
The Acacia Health Insurance, a member of the Enterprise Group, in spite of the difficulties facing the industry, has put up a good performance.
He said the company’s capital adequacy ratio stands at 167 percent, well above the regulatory threshold of 150 percent.
“Although the minimum capital requirement for players in the private health insurance scheme is GH¢5.4million, Acacia Health Insurance Limited has stated capital of GH¢18.6million,” he said.
He explained that the company is currently serving more than 34,000 customers across the country, stressing that: “Our vision in the next to three years is to increase our membership to 60,000 – and the long-term priority is to achieve 100,000 membership,” he said.