SHIF transition team wants to suspend implementation plan from July 1

The Ministry of Health, the team said, should consider continuing with the NHIF and revoking the regulations already published on the new system.

“The trial run of the SHA ICT system in Marsabit revealed that the new system is not yet ready. The challenges are being addressed and a second trial run with proxy mean testing can be conducted thereafter,” the committee’s report said after a meeting last Friday.

“The ICT experts have been asked to propose alternatives to the ICT system for the SHA, especially in the area of ​​registration and contribution. There is a need for an alternative solution that also includes the withdrawal of the SHA regulations and the use of NHIF systems, and the latter has financial implications. The nature of the contract with the current NHIF system licenses and contracts needs to be renewed.”

The committee, chaired by Dr. Jason Kap-Kirwok, was launched by Health Cabinet Secretary Susan Nakhumicha on January 30, 2024.

At the end of March, Ms. Nakhumicha published regulations stating that the SHIF would come into force on July 1.

All Kenyans over the age of 18 must pay compulsory contributions to the SHIF. Billions of shillings are earmarked to finance universal health insurance.

Under the plan announced by the Ministry of Health, Kenyan workers will pay 2.75 percent of their gross monthly income into the SHIF starting July 1. For top earners, this represents a more than eightfold increase in contributions in an economy where many workers’ net incomes have shrunk due to rising inflation.

For example, employees earning up to Sh50,000 a month will have to pay a deduction of Sh1,375 under the SHIF, while the NHIF pays Sh1,200. For an employee earning Sh100,000 a month, the deduction is Sh2,750, while the NHIF currently pays Sh1,700 – an increase of 62 percent. For employees earning Sh500,000 gross salary, the deductions will increase eightfold to Sh13,750, unless a cap is introduced.

However, there would be some relief for low-income earners through SHIF. For example, for an employee with a gross salary of Sh20,000, Sh550 would be deducted from SHIF, compared to Sh750 under NHIF.

Kenyans without a source of income will also be forced to pay at least Shillings 300 every month to the SHIF as the government seeks a huge funding pool to finance UHC.

However, the recommendations of the SHA Transitional Committee dampen these plans and are a serious blow to the state, especially given the problems with the NHIF, which have even led some private hospitals to cut ties with the system due to unpaid debts.

More than 400 members of the Rural Private Hospitals Association of Kenya (Rupha) stopped accepting NHIF cards in May after alleging that the insurer owed them more than Sh6 billion – a staggering sum that has crippled their operations.

Earlier this year, the Ministry of Health announced that setting up the ICT system, which will act as a central management system for health care providers, would cost at least Sh5 billion. This amount could be lost if the proposal to overhaul the NHIF system goes through, leaving Kenyans who are supposed to pay a portion of their monthly income into the system in a dilemma.

Last month, some MPs raised concerns about the lack of transparency in the system used by the SHA to register Kenyans in the new health system. They called on the ministry to suspend the registration of Kenyans in the SHIF, which has already begun, until it is clear how it procured the ICT system used to register members.

MPs on the Health Committee claimed that the system was procured without due process and put the lives of Kenyans at risk as the security of the personal data collected was not guaranteed.

“The system the SHA is using to register Kenyans in the new health system is full of ambiguities. We do not know the name of the IT company, the costs involved or the amount of data already collected. At first glance, this appears to be a breeding ground for corruption,” said Anthony Kibagendi, MP for Kitutu Chache South.

Section 47 of the SHIF requires that digitalization and processes be carried out through an information system using appropriate, reliable, secure, interoperable, auditable and responsive technology.

Processes and services include member registration, member identification, fund contribution payments, listing of entities, contract execution, member identification, notification and pre-authorization, claims management and claim settlement.

It further states that every Kenyan must be uniquely identified for the provision of healthcare services and that the digitization of processes and services must comply with the provisions of the Data Protection Act 2019 and all other relevant laws.

The latest development comes at a time when the ministry has yet to start means testing to identify vulnerable households in need of financial assistance. Under the NHIF, the ceiling is Sh1,700, an amount that is multiplied for certain groups of high earners. While non-salaried workers previously paid Sh500 per month to the NHIF, this amount will be reduced to Sh300 under the new system.