Top earners to contribute more for NHIF in proposed changes

Cabinet Secretary Ministry for Health Mutahi Kagwein a past press conference. [Stafford Ondego, Standard]

Kenyans earning more than Sh100,000 per month will see a substantial increase in their National Hospital Insurance Fund (NHIF) contributions if proposed regulations by the Ministry of Health are passed.

Draft regulations published by Health CS Mutahi Kagwe in consultation with the NHIF board seek to change the current bands, where maximum contribution is capped at Sh1,700.

Under the draft National Health Insurance Fund (Contributions) Regulations, 2022, Kenyans earning more than Sh99,999 will be contributing 1.7 per cent of their gross income to the NHIF.

The proposed regulations, if passed, will increase monthly premiums for earners of more than Sh100,000 beyond the current flat rate of Sh1,700.

For instance, a person earning Sh150,000 will see their premiums rise by 50 per cent to Sh2,550 from the current Sh1,700.

Those earning Sh200,000 per month will contribute Sh3,400 — being double their current contributions, while those earning Sh500,000 will see their premiums rise five times to Sh8,500.

The proposal, alongside four others, were published yesterday, with NHIF Chief Executive Peter Kamunyo indicating that they will be subjected to public consultation between February 23 and March 22.

Increasing premiums for top earners looks set to raise income for NHIF, which is expected to take the lead in implementing the Universal Health Coverage (UHC) programme.

Kenya National Bureau of Statistics (KNBS) data on distribution of wage employment and monthly income shows there were 79,909 Kenyans taking home more than Sh100,000 in 2020 compared to 78,042 in 2016.

NHIF’s proposed changes come barely a week after President Uhuru Kenyatta launched the national rollout of UHC in Mombasa.

Uhuru’s administration has developed the UHC policy for the period 2020-2030, to guide in achieving healthcare for all. “We seek to eradicate the ‘poverty of dignity’ and transition our nation into an era where no Kenyan should be forced to choose between medical bills and other essential needs,” the President said last week.

NHIF and the Ministry of Health are pushing for compulsory contribution to the national health insurer by all Kenyans aged 18 years and above.

However, NHIF's latest data shows 5.7 million, or 54 per cent of its 10.6 members, are dormant with many having stopped contributing to the fund after benefiting from the cover.

In the financial year ended June 2021, NHIF collected Sh57.18 billion as premiums from its members and paid out Sh52.04 billion, 91 per cent, as claims.

The rise in dormant NHIF members leaves more people vulnerable to poverty in an environment where insurance penetration is already low and about a quarter of all Kenyans’ healthcare bills are paid out of pocket.

This makes families reliant on debt and donations or disposal of assets such as livestock and land.

The State wants a mandatory UHC national scheme for all Kenyans, regardless of their economic status, and is counting on NHIF for management.

It has offered to sponsor one million poor households at the onset of the UHC scheme.

NHIF data shows the current number of registered members covers about 12.7 million Kenyans, or about a quarter of the population.

Currently, parents who are members of NHIF are allowed to enroll their children as beneficiaries until they turn 18. NHIF only continues to cover such beneficiaries up to 21 years provided they have no income of their own and are living and fully depending on the contributors.

Only those who are mentally or physically handicapped and fully dependent on and living with the contributors are excluded from getting their own cover after 21 years.

NHIF has seen a number of its proposals run into headwinds, including one making it compulsory for every adult to contribute to the fund.

The State-backed fund was also pushing to have every employer match contributions made by employees in a bid to get more money to pay hospital bills.