As we speak, the Social Health Insurance Fund (SHIF) is set to revolutionize the Kenyan healthcare landscape. This new fund aims to replace the National Health Insurance Fund (NHIF), which has been serving Kenyans for over 57 years. It is also one of the ambitions plans of President William Ruto that seeks to provide affordable healthcare to all Kenyans. But what is Social Health Insurance Fund?
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The Social Health Insurance Fund (SHIF) is a healthcare financing model based on risk pooling. It combines risks and contributions from various sources to provide health and financial protection. Despite its fairness, expanding coverage has been challenging for many less affluent and developing countries.
The Evolution of NHIF and the Birth of the Social Health Insurance Fund
The NHIF was established 57 years ago. Since then, it has undergone several changes to adapt to the evolving healthcare needs of the Kenyan population.
In 2021, the NHIF revised its contribution rates, setting them between Sh150 and Sh1,700 for salaried employees. However, its inability to fully cater to the needs of the poor and those working in the informal sector has been the greatest challenge.
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In November 2023, Health CS Susan Nakhumicha announced the official start of the Social Health Insurance Fund Act that will replace NHIF. This fund, in her statements, is designed to bridge the gap mentioned earlier and ensure that all Kenyans, regardless of their economic status, have access to health services.
Legal Challenges and Achievements of SHIF
The implementation of SHIF faced a major setback upon its inception when the High Court halted its rollout following a petition by businessman Joseph Enock Aura.
However, the Court of Appeal lifted the ban on January 19,2024. This was cited by the fact that the suspension posed a “real and present danger to the rights of countless citizens who are not parties to the litigation.’’
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Upon lifting of the suspension, a newly established Health Insurance Authority including Dr Timothy Olweni and Francis Atwoli will oversee the funding and public healthcare benefits. It is expected that by October 2024, the National Health Insurance Fund (NHIF) will be phased out, with its funds transferred to SHIF.
Contribution Structure of SHIF
Under SHIF, all employed individuals are required to contribute 2.75% of their salaries to the fund. This is a departure from the NHIF structure, which had a maximum cap of Sh1,700 for those earning Sh100,000 or more.
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With the new SHIF structure, contributions increase with income as shown below.
| Income Bracket | NHIF Deduction | SHIF Deduction |
| Sh20,000 | Sh750 | Sh550 |
| Sh50,000 | Sh1,200 | Sh1,375 |
| Sh100,000 | Sh1,700 | Sh2,750 |
| Sh200,000 | Sh1,700 (capped) | Sh5,500 |
| Sh500,000 | Sh1,700 (capped) | Sh13,750 |
| Sh1 million and above | Sh1,700 (capped) | Sh27,500 |
.
Registration for SHIF
Registration for SHIF is mandatory for all Kenyans and foreigners residing in Kenya for over 12 months.
The registration process includes all Kenyans, non-Kenyan residents of Kenya, and children born after the commencement of the act.
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Registration will be conducted continuously at various points as prescribed by the Cabinet Secretary Susan Nakhumicha.
Additionally, proof of registration is required to access public services from national and county governments.
Mandatory Contributions for SHIF
Contributions to the Social Health Fund will come from:
- All Kenyan households
- Non-Kenyan residents residing in Kenya for twelve months
- County governments
- The national government
- Other employers.
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Contributions to SHIF are mandatory for all adults seeking government services. Foreigners staying in the country for more than a year are also required to contribute to the scheme. Short-term visitors are required to purchase travel health insurance recognized under Kenyan laws.
Provisions for the Unemployed and Vulnerable
For those without employment or classified as vulnerable, the monthly contribution is set at Sh1,000. The national and county governments have pledged to support needy Kenyans, with the national government contributing Sh13,300 for individuals identified as vulnerable by the State Department of Social Protection.
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Beneficiaries of SHIF
The SHIF will cater to the health and financial needs of a wide range of individuals. These beneficiaries include:
- The contributor
- Dependents under 21 years with no income
- Full-time students under 25 years
- Individuals with disabilities who are entirely dependent on the contributor
- The contributor’s spouse.
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Pros and Cons of SHIF
The Social Health Insurance bill has potential benefits, such as improved access to healthcare and reduced administrative costs, but also faces criticism.
It aims to shift focus from hospital-centric care to primary healthcare, benefiting a larger population.
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However, this scheme has faced some criticism. The associated claims concern potential corruption, additional tax burdens, and the influence of special interests.
Senator Ledama Olekina of Narok believe this scheme is corrupt. The senator has expressed skepticism about the longevity of the proposed Social Health Insurance Fund (SHIF) following the enactment of the Social Health Insurance Act, 2023.
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Olekina believes that the SHIF, which is poised to take over from the National Hospital Insurance Fund (NHIF), will impose additional tax burdens on Kenyans without providing adequate healthcare services.
Regardless of the setbacks, the establishment of SHIF has marked the beginning of a series of changes in health sector. These are not limited to the three new funds under this act: The Primary Healthcare Fund, the Social Health Insurance Fund, and the Chronic Illness and Emergency Fund. It is anticipated that this will serve the purpose of a common good for all Kenyan citizens.
