The proposal will replace the current contribution system with a flat rate of 2.75 per cent of contributors’ gross salary
To accelerate the attainment of affordable and quality universal health coverage (UHC) in Kenya, a raft of radical reforms must be undertaken by the National Health Insurance Fund (NHIF), according to a new proposal by authorities.
According to the proposed National Health Insurance Fund Regulations (NHIF), 2023, employed Kenyans will soon be required to pay a flat rate of 2.75 per cent of their monthly income to NHIF.
The government picked NHIF as the primary implementer of UHC due to its long-standing experience in health insurance and established infrastructure.
The state plans to drop the current deduction system, where salaried workers have been paying between £1 (Kenyan shilling or Ksh 150) and £12 (Ksh 1,700), depending on their monthly pay. Those in the informal sector have been paying a flat rate of £3.6 (Ksh 500).
The proposal will replace the current contribution system with a flat rate of 2.75 per cent of contributors' gross salary. The aim is to expand the fund and cushion it against regular liquidity challenges resulting from a high claim ratio.
A contributor in salaried employment shall pay a standard contribution at a rate of 2.75 per cent of the gross monthly income derived from employment in the preceding month, according to the proposal.
“Meanwhile, a contributor in self-employment shall pay a special contribution to the fund at a rate of 2.75 per cent of the declared or assessed gross monthly income, but subject to a minimum of £2 (Ksh 300),” it added.
A contributor who is neither employed nor listed as an indigent or a vulnerable person shall pay a monthly contribution of £2 (Ksh 300), according to the proposal.
In the new arrangement, the government will fully take care of each Kenyan registered / considered vulnerable with no source of income or benefactors to the tune of £95 (Ksh 13,300).
“The amount payable by the national government on behalf of indigent and vulnerable persons shall be Ksh 13,300,” read the proposal.
While announcing the proposal, President William Ruto decried the shrinking size of the fund and called it “unfair” to people with low incomes. He said capping the contributions at £12 (Ksh 1,700) was denying NHIF necessary funds from high earners like himself who can comfortably pay as much as 27,000.
“We have changed the contribution mechanism and formula to have an equitable contribution mechanism. Every one of us is going to contribute 2.75 per cent of their earnings to NHIF so that we can carry this healthcare load equally,” said the president.
Besides the radical reforms in the NHIF contributions, the government is keen on bolstering its Primary Healthcare Strategic Framework. To this end, the Treasury has set aside £24,902,170 (Ksh 3.5 billion) to recruit and equip mobile Community Health Promoters (CHP) countrywide.
Primary healthcare is the cornerstone of sustainable health systems for UHC, health-related Sustainable Development Goals (SDG) mandated by the United Nations and health security, according to the World Health Organization (WHO).
A total of 120,000 CHPs will be recruited and equipped for Kenya’s 50 million population, which the Kenya National Bureau of Statistics (KNBS) estimated in their 2019 Population and Housing Census to be residing in over 12 million households of 4-5 members each.
Each CHP will have jurisdiction over 100 homes, which they will regularly visit to diagnose chronic cases at early stages for referrals and treat minor illnesses to help avoid congestion at hospitals, said Ruto during the announcement, adding:
Many of the conditions with which people end up in our hospitals are minor. If they are managed early, we will decongest our hospitals. Each of the medics will be tasked with visiting Kenyans at their homes to offer basic medical attention.
The Health Promoters will also check on patients with chronic conditions to help them manage their medication, diets and general wellbeing to minimise or eliminate the need for hospitalization.
Plans to accelerate the attainment of UHC have received approval from most stakeholders, except a few who have reservations about the proposed NHIF deductions. The latter have cited the history of corruption and mismanagement of the funds as major concerns.
Alice Achieng, a vegetable vendor in Nairobi, said the proposed reduced deductions will greatly relieve her and others in the informal sector.
“We have been paying £3.6 (Ksh 500) monthly to the scheme. With the tough economic times, some of us have defaulted, resulting in penalties. I am happy we will now be paying £2 (Ksh 300), which is a relief considering the hard economic times,” she said.
However, employed Kenyans, like James Mugo, are unhappy with the proposed deductions. Mugo said the deductions will exceed the initial cap of £12 (Ksh 1,700), depending on one’s salary.
“The new deductions will worsen the situation, especially coming at a time we are wallowing in harsh economic times. Some salaried people like myself will now pay more than £36 (Ksh 5,000) from our already emaciated payslips,” said Mugo.
The national insurer has been of great help to many vulnerable Kenyans but has also faced various challenges, including corruption and mismanagement of contributions.
In its latest financial report, the NHIF indicated that more than eight million members have defaulted on their monthly contributions due to the economic crises.
Theft of funds had rocked the national insurer in the past, leaving vulnerable patients who can’t access private facilities to suffer, said the new NHIF chairman, Michael Kamau, last week.
“Regrettably, the fund has faced many challenges, but we have been clearing the mess behind the scenes and things are bound to improve. No more double claims by unscrupulous hospitals and health practitioners. The increased contributions will also bring enhanced benefits to contributors,” said Kamau.
More ailments will now get insured, with increased reimbursements to rope in top hospitals that often keep off the NHIF, the chairman added.
“Going forward, NHIF members who suffer from chronic illnesses like cancer, cardiovascular diseases, diabetes, respiratory disease and mental health conditions will now be covered,” he said.
Other stakeholders, including the Kenya Medical Practitioners Pharmacists Dentists Union, have embraced the proposals but want the funds cushioned against graft.
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In the new arrangement, the government will fully take care of each Kenyan registered / considered vulnerable with no source of income or benefactors. Photo: iStock.png)
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