New NHIF proposals face strong opposition

February 18, 2022 - Reading Time: 2 minutes - By Kennedy Osore

The Cabinet Secretary for Health has published the National Health Insurance Fund (Contributions) Regulations, 2022 (Draft Regulations). The changes are meant to boost Universal Health Coverage (UHC), but for the changes to work, Ms Mugo, Executive Director of FKE, stated that NHIF needs to step back and examine whether this is the right direction to take. 

The Draft Regulations will need to first get parliamentary approval before taking effect. Currently, contributions to NHIF are on a graduated scale with employees earning over KES 100,000 paying a fixed monthly contribution of KES 1700. Below are the proposed new contribution rates.

Issues arising in the Draft Regulations include:

The term voluntary contributor is misleading since the Draft Regulations state that any person over the age of 18 years must be a registered contributor/ beneficiary before seeking government services. There is, therefore, no voluntary aspect to the contributions as everyone above the age of 18 years is mandated to contribute.

Employers will be required to match the employee contributions and they have opposed proposals to match workers’ contributions, warning that higher rates would push up their wage bills and weaken the capacity of businesses to create new jobs and sustain existing ones. contributions. 

Below is a summary of the proposed rates under the Draft Regulations:

Range of Total Gross Monthly Income (KES)Amount of Monthly Contribution
1.Less than 6,000150
2.6,000 -7,999300
3.8,000 – 11,999400
4.12,000 – 14,999500
5.15,000 – 19,999600
6.20,000 – 24,999750
7.25,000 – 29,999850
8.30,000 – 34,999900
9.35,000 – 39,999950
10.40,000 – 44,9991,000
11.45,000 – 49,9991,100
12.50,000 – 59,9991,200
13.60,000 – 69,0001,300
14.70,000 – 79,9991,400
15.80,000 – 89,9991,500
16.90,000 – 99,9991,600
17.More than 99,9991.7%

Other proposals in the Draft Regulations include:

  1. Salaried employees (standard contributors) earning less than KES 3,000 per month will not be liable to contribute to the fund.
  2. Voluntary contributors will be required to contribute KES 500 monthly.
  3. Beneficiaries of voluntary contributors will be denied access to benefits where the voluntary contributor fails to remit any voluntary contributions due.

The Federation of Kenya Employers (FKE) has however opposed the proposed new rates as they will make the Kenya business environment uncompetitive and eventually aggravate an already worse situation facing enterprises countrywide. As such, FKE has called upon the NHIF to revert to the drawing board with all stakeholders and provide a win-win solution for all.

The Central Organization of Trade Unions Kenya COTU (K) similarly has strongly opposed the proposed changes, affirming that the appropriate avenue to provide funding for affordable and quality healthcare is via government budgetary allocations and not through the NHIF scheme. 

Furthermore, COTU (K) has stated that the government’s proposals will be contradictory vide the fact that the Ministry of Health has promised the funds to NHIF to ensure UHC roll out, yet the government intends on passing the higher charges onto NHIF members that are already overburdened with excessive taxes. 

The proposed changes to NHIF will correspond with a rise in the cost of doing business by increasing the employers’ wage bill. Employers are likely to adopt measures such as reluctance to increase employee salaries, as well as phasing out of employee benefits such as suspending private medical insurance in a bid to sustain the added NHIF costs.

The 2022 regulations have already faced strong opposition, which is anticipated to increase as more employers and trade unions are expected to follow suit, and express their condemnation of the Draft Regulations. 

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