Medical bills in Kenya are expected to rise 13 percent next year, according to a forecast by London-headquartered professional services firm Aon. This increase beats the global average of nine percent and Kenya's inflation rate. Aon attributes the expected increase in the cost of treating patients and providing healthcare services to factors such as an increase in the cost of basic needs or inflation, increased hospital visitations, a surge in drug costs, and a rise in imports.
The rising medical costs could force insurers to increase premiums to match the swelling hospital bills. Insurers have been facing rising medical payouts due to escalating healthcare costs, increased hospital visits, and higher utilisation of outpatient and specialised services. Some insurers have already dropped some clients due to the high costs. Medical costs such as consultation, laboratory tests, and medicine have been on the rise, accelerating health inflation.
Nairobi Hospital had rolled out an increase in prices ranging from 2.07 percent to 61.3 percent or between Sh70 and Sh5,000, affecting services such as computed tomography (CT scan), magnetic resonance imaging (MRI), ultrasound, X-rays, bed charges, and intensive care unit (ICU). However, it shelved the increment after uproar from insurers. Employees under employer-backed medical plans could see their employers review medical benefits, potentially exposing them to higher co-payments, deductibles, and out-of-pocket expenses.
Kenya's projected 13 percent increase in medical costs will mark the first moderation of the pace in five years. The rate had climbed from 9.8 percent in 2023 to 12.5 percent the following year and 13 percent in 2025. Aon's forecast estimates annual changes in the cost of employer-sponsored medical plans, drawing on expectations from its professionals working with corporate clients and insurers in more than 100 markets across the world.
Kenya's projected medical inflation also exceeds its expected general inflation rate of 5.9 percent by 7.1 percentage points, indicating that healthcare costs will continue rising much faster than the overall cost of living. The increase is also higher than North America (9.2 percent), Asia-Pacific (9.7 percent), and Europe at 7.5 percent. Latin America and the Caribbean are projected to record a 10.4 percent increase.
Aon attributes the moderation in healthcare cost increases across Africa to easing foreign exchange volatility and lower general inflation. However, dependence on imports and the rising prices of private and specialist care continue to keep medical cost increases in double digits. Chronic and lifestyle-related conditions are major drivers of medical plan costs globally, with cardiovascular disease remaining the leading contributor, followed by cancer and hypertension.
The report ranked Kenya ninth highest in projected medical inflation among 19 African markets covered. Kenya's projected rise in medical costs is below Ethiopia (35 percent), Angola (25.5 percent), Egypt (23 percent), Nigeria (20.9 percent), Zimbabwe (18 percent), and Ghana, the Democratic Republic of Congo, and Mauritius at 15 percent each. Some of the African countries where employer-backed medical insurance schemes will see lower increases than Kenya include Côte d'Ivoire (10.3 percent), Zambia (10 percent), South Africa (9.8 percent), Tunisia (9 percent), and Botswana (8.5 percent).
Key points
- Medical bills in Kenya are expected to rise 13 percent next year, beating the global average and Kenya's inflation.
- The rising medical costs could force insurers to increase premiums to match the swelling hospital bills.
- Kenya's projected medical inflation exceeds its expected general inflation rate of 5.9 percent by 7.1 percentage points.
