Healthcare providers and the Federation of Kenya Employers (FKE) have raised concerns with President William Ruto’s radical changes to the healthcare plan as contained in the Social Insurance Health Fund (SHIF)

The stakeholders, in an engagement with the Ministry of Health over three Bills under SHIF, raised issues on the proposed percentage deduction of 2.75 per cent, the mandatory contributions, the denial of government services to those not registered and the fate of current employees of the NHIF and the pending claims, among others.

The proposed laws – the Primary Health Care Bill, 2023; Digital Health Bill, 2023 and the Facility Improvement Bill, 2023 – have been lined up for introduction for first reading on Thursday during a National Assembly special sitting.

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While the stakeholders lauded the overall plan as a noble idea in attaining universal health coverage, they said more engagement is needed in addressing a number of grey areas in the draft Bills.

Faith-based health services consortium, in its draft memorandum to the ministry, said there is need to review downward the proposed 2.75 per cent deduction for salaried employees to 1.5 per cent, taking into account the high cost of living.

“Recently, the Finance Act 2023 took away substantial amounts from the same payslip, and the cost of living remains high for several reasons including a rise in fuel prices. We recommend 1.5 percent deduction,” reads the memorandum.

“This rate takes a lot more from distressed salaried citizens, whose income support large households of family and relatives,” the organisation says.

Moses Mokua, the consortium’s head of the technical working group, opposed the proposal to deny citizens not registered in the social scheme services, saying there are better ways of encouraging Kenyans to register.

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“This should be amended, and Kenyans should not be denied essential public services on account of SHIF registration. Find mechanisms of positive motivation to achieve near 100 per cent registration of all eligible residents,” reads the memorandum.

The organisation also called on the government to ensure that all pending claims to hospitals – amounting to over Sh6 billion – are paid before the transition to the new scheme.

“There should be a time period to adjudicate; three to four months. This task should be resolved by NHIF or the dispute resolution committee at the earliest opportunity,” reads the memorandum.

Executive director of the Federation of Kenya Employers Jacqueline Mugo pointed out that there is need to prescribe the specific applicable rate payable by those in employment and those in the informal sector just like it is with schemes such as the NSSF.

“This is to conform to the Employment Act – The rate should be prescribed in the Act. Like NSSF Act, NITA Act, Employment Act (Affordable housing Levy) have set precedence,” Ms Mugo said.

Staffing issue

On the transition from NHIF to the new social scheme, employers have told the government to ensure that labour laws are followed to ensure a seamless transition of staff.

The federation also demanded to be included in the Social Health Authority that, according to the Bill, seeks to establish the framework for the management of social health insurance.

“The authority to absorb the staff of NHIF and follow the due process provided for in the applicable labour laws. On the appointed day, the staff of the Fund shall, without further assurance, be assumed to be the staff of the Authority,” FKE said.

“The authority will largely depend on the contributions of employees in formal employment. This means that accurate deduction and timely remission of these contributions will be done by employers, hence the need for employers’ representation on the board,” Ms Mugo said.

The Rural Private Hospitals Association raised concern over the fate of capitation to the Linda Mama and EduAfya programmes with the split of NHIF into three separate funds.

The association’s chair Brian Lishenga called for an amendment of the proposal on payment to the scheme by those not salaried saying it is not possible for them to make a one-off annual payment as contemplated.

“People without salary will struggle to make the annual payment. They should be allowed to make payments in instalments,” Dr Lishenga said.

Read: How proposed NHIF rates will affect top earners

Healthcare Federation chair Kanyenje Gakombe expressed concern over the possible carry-over of a negative corporate culture from NHIF into the new scheme.

“Just ensure that those with the NHIF culture do not contaminate the new system because it will end up eroding the gains,” Dr Gakombe said.

He also advised that the digital scheme be piloted early to gauge its success before it can be rolled out to the whole country.

“Digital systems are very difficult to run even in countries that are advanced in terms of technology,” Dr Gakombe warned.

Why it’s necessary

But Dr Daniel Mwai, the State House advisor on health, defended the mandatory contribution saying it would ensure there are sufficient funds in the scheme, while the 2.75 deduction would cure the regressive mode of payment currently being implemented by NHIF.

For the non-employed, he said the regulations will be developed jointly with all stakeholders to determine the amount they will pay annually as this cannot be put in the Act.

“We have a majority of people who currently only pay NHIF when they are sick. Sometimes they just pay Sh500 but will make a claim of Sh50,000. Where is this money going to come from? That is why it has to be compulsory,” Dr Mwai said.

He noted that NHIF is currently struggling to pay health facilities because many sick people who have not been contributing are brought into the pool.

Medical Services Principal Secretary Harry Kimutai assured that public participation would help the ministry shape the Bill before it is presented to Parliament.

“The views from the stakeholders are going to help us in shaping the final Bill. From the views presented, I am going to tell my team that here we have gone overboard or here we are below par and, therefore, need to improve,” Mr Kimutai said.

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