SME Health Insurance: An Urgent Need

About 7.4 million Small and medium-sized enterprises (SMEs) form the backbone of Kenya’s economy, contributing 40 per cent of its GDP and employing nearly 78 per cent of its working population. Yet, amidst this socio-economic vitality lies a sobering reality – a large portion of the hardworking individuals employed by SMEs and their families are without adequate health insurance coverage.

According to recent data from the National Bureau of Statistics (KNBS), only 19 per cent of Kenya’s population has health insurance, leaving a vast majority vulnerable to the uncertainties of healthcare costs. For SME workers, this translates to a glaring gap in their financial security and well-being.

The reasons behind this discrepancy are multifaceted, but one primary hurdle stands out: cost. About 94 per cent of small employers in a study said they find it challenging to offer health insurance, with nearly half describing it as very challenging. The stark reality is that the burden of providing comprehensive health coverage often outweighs the financial capabilities of small businesses, leaving them with few viable options.

Additionally, the available health insurance options for SMEs are far from favourable. Many find themselves locked out of group cover benefits due to unfavourable terms for those with fewer employees. Even for those who manage to secure coverage, the road is fraught with obstacles. Extended waiting periods, co-payment requirements at the point of claim, and convoluted policy structures, including upper age limits for renewal, serve as deterrents, rather than incentives, for potential buyers.

The current scenario paints a bleak picture for SMEs and their employees. As pillars of our economy, they deserve better – a system that empowers rather than impedes, that nurtures rather than stifles. It’s time for a paradigm shift prioritizing the health and well-being of our largest workforce.

Addressing this issue requires a multifaceted approach, starting at the policy level. Policymakers must work in tandem with industry stakeholders to devise solutions that mitigate the financial strain on SMEs while enhancing the accessibility and comprehensiveness of health insurance options. This could entail targeted subsidies, regulatory reforms, and innovative public-private partnerships aimed at expanding coverage and driving down costs for small enterprises.

Additionally, there is a pressing need for heightened awareness and education campaigns to empower SMEs with the knowledge and tools needed to navigate the challenges of health pursuing health insurance. By fostering a culture of proactive risk management and financial planning, SMEs can be empowered to make informed decisions that safeguard the well-being of their employees and their families.

The writer is the General Manager, Health, Old Mutual