The Kenyan government has proposed a new social healthcare fund that will require every household in Kenya to pay 2.75 per cent of its monthly income to fund universal health coverage (UHC) for all Kenyans.
If passed and approved, the Social Health Insurance (General) Regulations, 2023, will replace the National Health Insurance Fund (NHIF), which has been in operation for 57 years.
The draft Social Health Insurance (General) Regulations, 2023, which were published by the Ministry of Health, are meant to implement the Social Health Insurance Act, 2023, which was gazetted in November.
The regulations will require public participation before they are enacted.
According to the draft regulations, households whose income is derived from salaried employment will pay a monthly statutory deduction contribution to the Social Health Insurance Fund at a rate of 2.75 per cent of the gross salary or wage of the household by the ninth day of each month.
The 2.75 per cent deduction will not be capped at a maximum of Sh5,000, as had been promised earlier by several government officials, including Health CS Susan Nakhumicha.
This means that high-income earners will pay much more than the current maximum of Sh1,700 per month. For example, a household earning Sh500,000 per month will pay Sh13,750, unless a cap is introduced.
However, households earning up to Sh30,000 per month will pay less than the current minimum of Sh150 per month. For example, a household earning Sh10,000 per month will pay Sh275.
The regulations also propose that households in the informal sector will pay Sh300 per month, which is a 40 per cent reduction from the current Sh500 per month.
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The new social healthcare fund will be divided into three sub-funds: the primary healthcare fund, the healthcare fund, and the emergency, chronic, and critical illness fund. The fund will be used to provide quality and affordable healthcare for all Kenyans, which is the government’s goal to ensure that no one is left behind in accessing health services.
The fund will be managed by a Social Health Authority, which will replace the NHIF.
The authority will face the challenges of fraud, corruption, liquidity strain, high claims ratio, and rampant default on contributions by members, which have plagued the NHIF for years.
As of the end of June last year, NHIF had 15.4 million members, but only about half were actively making contributions, as about 8.8 million were marked as dormant.
The new act has now tied access to government services to be an active contributor to the social healthcare fund. It has also imposed a two-percent penalty on any defaulted contributions.
The government has been rolling out the UHC program, which it seeks to provide quality and affordable healthcare for all Kenyans. It has picked the Social Health Authority as the primary implementer of UHC.
Highlights of the Draft Social Health Insurance (General) Regulations, 2023
- If you are on a salary or payslip, you will pay 2.75 per cent of your gross income to the social healthcare fund by the ninth day of each month.
- If you are not on a salary or payslip, you will pay an annual contribution based on your household income as determined by a prescribed means of testing. You will pay 14 days before the expiration of your last annual payment.
- The means of testing are prescribed in Regulation 21, and they are based on surveys that collect data on household characteristics, composition, and socioeconomic metrics.
- The Ministry of Health will liaise with the Ministry of Cooperatives and MSMEs to see how to include non-payslip Kenyans in the contributions.
- The minimum contribution is Sh300.
You can read the draft regulations and send your comments by December 12, 2023, at 5:00 p.m. to regulations@health.go.ke.
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