5 Must-Know Medical Insurance Terms for Kenyans

When Kenyans shop for new medical insurance plans, one of the main hurdles they face is understanding medical insurance terminology. To help you out, we have briefly discussed 5 of the most common terms you will encounter
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1.       Premium

Your medical insurance premium is the sum of money you pay to the Kenyan insurance company every month to maintain your coverage. When evaluating the cost of any health insurance policy, the premium is the first thing to consider. Remember to always balance the premium against other fees, such as deductibles, copayments and coinsurance, in order to arrive at the correct cost of a plan and pick the best plan for your needs. As a rule, make sure to pick a lower premium/higher deductible plan if you desire to save money. Alternatively, you can pick a higher premium/lower deductible plan if you intend to be more financially prepared for your unexpected medical expenses in the future.

2.      Copayment

The copayment (copay) is the specific amount in Kenya Shillings that you are required to pay up-front for a particular type of service. For example, your medical insurance plan may require a copayment of Ksh 200 for a visit to a clinic or a brand-name prescription drug, after which your insurance company will pay the remainder of the charges. As a rule, you should pick a plan with an affordable and consistent copayment if you make frequent visits to the doctor.

3.      Deductible

The annual deductible is the sum of money you may be required to pay out-of-pocket before your insurance company can begin paying for your covered medical claims. Remember that you monthly premiums and copayments are not considered part of your deductible. In Kenya, not every medical insurance plan requires a deductible, but picking a plan with a higher deductible is a great way to reduce your monthly premium. As a rule, make sure your deductible is less or equal to 5% of your gross annual income.

4.      Coinsurance

Coinsurance is the amount you must pay for covered medical and surgical services after you have fulfilled any deductible or copayment required by your medical insurance plan. For instance, if your Kenyan medical insurance company limits coverage for particular services to, say x-ray charges at 80% of the cost, you will be required to pay for the remaining 20% of the charges even after your annual deductible is already completed. The 20% is the coinsurance.

5.       Maximum Out-of-Pocket Costs

When buying a new medical insurance plan, make sure to pay close attention to the maximum out-of-pocket costs. The maximum out-of-pocket costs limits your annual financial liability so that after paying the out-of-pocket costs (usually deductibles, coinsurance or copayments) to the maximum amount, the insurance company will pay the full charges on any extra covered medical serves provided that year. Your monthly premium does not affect your maximum out-of-pocket costs.

Conclusion

When shopping for insurance, make sure to read the fine print of every policy carefully. Use the terms described above to evaluate the policy exhaustively in order to choose that which suits your needs perfectly. Understanding your policy well not only helps you to choose the right plan, but also allows you to get the best value for your money.