The Social Health Authority (SHA) was established under the Social Health Insurance Act 2023 and has been positioned to offer social health insurance in a model envisioned to enable Kenya to achieve Universal Health Coverage (UHC).

 The idea behind this programme is that catastrophic out-of-pocket expenditure to finance access to healthcare will be a thing of the past, for it engenders poverty, and hence is not sustainable.

The government has gone ahead to announce that Kenyans will receive free emergency healthcare services, will be at liberty to choose healthcare providers of their choice and will contribute to the fund equitably based on household income. According to the state, low-income households will receive healthcare coverage commensurate with all members.

UHC was formulated under the World Health Assembly in 2005 and endorsed as a key resolution of the United Nations General Assembly in 2012. It urges countries to accelerate progress towards UHC.

The idea under UHC is that everyone, everywhere should have access to quality, affordable healthcare. In essence, countries should ensure coverage for health services with financial risk protection. Financial risk protection translates to protecting citizens from financial ruin linked to paying for healthcare.

 Kenya has made several attempts towards achieving UHC. It was actually one of the Big 4 agendas of the previous administration, with the National Health Insurance Fund (NHIF) mandated by law to deliver healthcare services.

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 Under the NHIF, Kenyans received healthcare services based on their contributions and NHIF was solely responsible for managing claims. The Linda Mama program, Edu Afya and Civil Servant schemes offered varying benefits to enhance access to healthcare services for all.

 The three funds, under SHA are the Primary Healthcare Fund, Social Health Insurance Fund (SHIF), and the Emergency and Chronic Illnesses Fund. These were created to cover different healthcare scenarios.

 The Primary Healthcare Fund will cater for primary conditions & the Emergency, Chronic and Critical Illness Fund will cater for chronic illnesses and complications that arise from these illnesses. The Primary Health Care Fund and Emergency and Chronic Illnesses Fund will be financed from the exchequer; the Social Health Insurance Fund will be financed by all members of the fund through contributions set at 2.75 per cent of their income.   

 The financing model in the social health insurance model under SHA will be from taxpayers’ money drawn directly from the exchequer, from statutory deductions for salaried citizens, and membership contributions to the Social Health Insurance Fund (SHIF) from non-salaried citizens. The benefits and tariffs formulated and gazetted under this model are out of touch with the reality of accessing healthcare services.

However, the rates are far below the market rates for most healthcare services, with limits as to the number of times one can seek treatment in a year and further limitation to the amount payable to each family member in a household. The question that remains unanswered is, why limit the number of times one would fall sick and seek treatment, yet it is common knowledge that no one chooses the nature, type and timing of sickness?

 In addition, the amounts allocated for treatment are insufficient and unrealistic. The SHA will pay Sh900 per person per household per year for outpatient services, Sh2000 for dental services, Sh900 for optical services and Sh2,240 per day for inpatient service.

 These amounts cannot cover the basic consultation fees by health professionals, laboratory and imaging costs and medication. The Act and regulations are silent on who bears the cost of treatment beyond the allocated rates.

 Fundamentally, all citizens will have to bear the additional cost of treatment beyond the 2.75% contribution deducted from their incomes. Hence, the rolled-out social health Insurance model will increase the cost of treatment burden on Kenyans and hinder access to healthcare for the majority.

 Essentially, the SHIF model has introduced an income tax for healthcare that is skewed against high-income earners. Recommendations by all stakeholders to cap these contributions were disregarded and this will further burden the less than 30 per cent of citizens in the formal sector and result in financial hardship and strain.

The unemployed population largely comprised of youth will be at a greater disadvantage since they will be required to take up loans to finance their healthcare. It is unjustifiable to look at one end of the income spectrum and conclude that if you earn more, you should pay an extremely high contribution while, the person who earns less or doesn’t earn an income, pays a fixed rate. This distribution should not be based on income taxes but on a general tax payable by all citizens.

The Primary healthcare fund and Emergency and Chronic Illnesses fund have a budget deficit of Sh94.9 billion. In total, the Social Health Authority has a budget deficit of Sh161.9 billion required for full operationalisation of the programme. The underfunding of this programme highlights the lack of commitment to providing quality and affordable health care by the government.

 Instead, the government has proceeded to procure an Integrated Healthcare Information Technology System at a cost of Sh104 billion. This is a classic case of private interests disguised as public interests, since procurement has been prioritised over service delivery. It brings to the core the issue of commitment to fighting corruption.

 The state of healthcare facilities in the country and their readiness to offer quality services to citizens is worrying and should have been remedied before adopting a new health insurance model.

 A combination of ill-equipped facilities, underfunding of the programme, disregard for recommendations from key stakeholders and poor public participation is a recipe for disaster. The government should rethink its approach to the health sector and save Kenyans from catastrophic healthcare expenditures.

Dr Mwachonda is a medical doctor and health and labour policy expert