Eight Insurers Suspend Coverage at Nairobi Hospital Amid Steep Price Hikes

In August 2025, Nairobi Hospital, one of Kenya’s premier healthcare institutions, faced a significant crisis as eight major insurance companies suspended their insurance services at the hospital. This dent in service access began on August 11 or 12, affecting many insured patients who rely on these insurers for medical care coverage at the facility.

Insurers Withdrawing Services

The insurers involved in this suspension include Madison Insurance, First Assurance, Minet, Old Mutual, Britam, AAR, CIC Group, and Pacis Insurance. This collective action was a direct response to a sharp increase in Nairobi Hospital’s treatment costs, with price hikes reaching up to 61% on several key services such as CT scans, MRIs, ultrasounds, bed charges, and ICU care.

AAR Insurance announced the suspension effective Monday, August 11, 2025, citing the steep price increase as unsustainable and unaffordable for their members despite earnest efforts to negotiate a volume-based pricing model with the hospital. Similarly, CIC Group communicated to its staff that it would suspend services effective Tuesday, August 12, 2025, emphasizing that the new rates were not only unsustainable but could not be remedied even with insurance premium adjustments.

Details of the Price Hike

Nairobi Hospital implemented these fee increases notably in July 2025, raising costs substantially on certain diagnostics and treatments:

🏥 Service	💰 New Price (KSh)	📈 Increase Amount (KSh)	📊 Impact Level
Pap smear and HPV test	16,500 each	+5,000	High Impact
Abdomen CT scans	30,000	Significant increase	Critical Impact
Heart MRIs	45,000	Major increase	Critical Impact
Chest MRI	27,000	+4,000	High Impact
ICU daily charges	42,250	+3,250	Critical Impact

These increases represented the largest adjustments among hospital services and were pivotal in triggering insurer pushback.

Hospital’s Response and Position

Nairobi Hospital’s CEO, Felix Osano, acknowledged the concerns raised by insurance companies but defended the tariff increases as necessary to sustain the quality and competitiveness of healthcare services offered. The hospital stated that independent pricing comparisons show their rates remain competitive relative to peer hospitals delivering similar care.

To address the dispute, Nairobi Hospital convened a consultative forum beginning August 11, inviting representatives of all affected insurance firms to engage in talks aimed at reaching a mutually agreeable solution that preserves patient access and care quality. The hospital reiterated its commitment to accessible, sustainable healthcare and expressed hope that continued dialogue would lead to an amicable resolution benefiting all stakeholders.

Impact and Broader Implications

The suspension of insurance services at Nairobi Hospital poses substantial access challenges for insured patients who now face the prospect of paying out-of-pocket or seeking care elsewhere. This standoff spotlights broader tensions in Kenya’s healthcare sector over balancing cost containment and quality service delivery.

Moreover, this dispute unfolds amid ongoing sector-wide regulatory changes, including the introduction of risk-based capital requirements for insurers and tax policy debates affecting the insurance market’s financial landscape. While these systemic changes are distinct from the Nairobi Hospital-specific tariff issue, they collectively shape the operating environment for both insurers and healthcare providers.

Summary

Key Points Recap

• Eight leading insurers suspended services at Nairobi Hospital starting August 11-12, 2025.
• The dispute arose after the hospital raised service fees by up to 61%, affecting critical diagnostic and inpatient care charges.
• Despite negotiation attempts, insurers deemed the new prices unsustainable and unaffordable.
• Nairobi Hospital defended the price hikes as essential to maintaining high-quality care and invited insurers to consultative forums.
• The suspension impacts insured patients’ access to care, underscoring challenges in healthcare affordability and provider-insurer relations in Kenya.

This ongoing crisis highlights the complex interplay between healthcare financing, provider sustainability, and insurance market dynamics. The outcome of the negotiations will be crucial for restoring seamless access to Nairobi Hospital’s services for insured Kenyans.