In a substantial effort to revamp healthcare financing, the Kenyan government has introduced the draft Social Health Insurance (General) Regulations of 2023. If this legislation is approved, it will mandate every household in the country to contribute 2.75 percent of their monthly income to the proposed Social Health Insurance Fund. This forms a crucial part of the broader strategy outlined in the implementation of the Social Health Insurance Act 2023, with the primary goal of gradually phasing out the National Health Insurance Fund (NHIF), an institution that has dutifully served the nation for over half a century since its establishment in 1966.

Health Cabinet Secretary Susan Nakhumicha outlined the proposed regulations, emphasizing that households deriving income from salaried employment should contribute a monthly statutory deduction equal to 2.75% of their gross salary or wage. The deadline for these contributions is set for the ninth day of each month.

Contrary to initial promises, the 2.75 percent contribution is not capped at a maximum of Sh5,000. This absence of capping may result in higher deductions for top earners, deviating from earlier expectations. The draft regulations are now open for public participation, providing stakeholders with the opportunity to express their views before the transition from the current NHIF deduction structure to the proposed one.

The impact of these proposed changes varies across different segments of the population. The draft suggests that individuals in the informal sector, contributing Sh500 per month, could potentially benefit from a 40 percent reduction, lowering their contributions to Sh300.

Workers earning a monthly salary of up to Sh30,000 will experience a reduction in their contributions, ranging from three percent to 45 percent. Conversely, those earning between Sh30,000 and Sh100,000 per month may face an increase in contribution rates, ranging from one percent to a significant 77 percent. Individuals with high incomes exceeding Sh100,000 per month will face even steeper deductions.

For instance, individuals earning a salary of Sh100,000 per month will now contribute Sh2,750, marking a 62 percent increase from the current deduction rate of Sh1,700. Similarly, unless a cap is introduced, those with a gross pay of half a million shillings will witness their deductions skyrocket to approximately Sh13,750.

The implementation of the Social Health Insurance Act 2023 will lead to the disbandment of NHIF, paving the way for the establishment of the Social Health Authority. This emerging authority aims to oversee three funds: the primary healthcare fund, general healthcare fund, and emergency, chronic, critical illness fund. The government has designated it as the principal executor of the UHC program, with the goal of offering all Kenyans affordable yet high-quality healthcare services.

The new authority will face challenges brought about by these proposed changes, including fraud, corruption, liquidity strain—issues currently faced by NHIF—along with a high claims ratio and rampant default on contributions. As of June in the previous year, NHIF boasted 15.4 million members; however, only about half were active contributors, with approximately 8.8 million lying dormant.

The new act will tie access to government services with active contributions towards social healthcare, imposing a two percent penalty for defaulted payments. This strategy represents a paradigm shift, encouraging individuals to actively participate in the proposed healthcare financing model. As Kenya navigates through these changes, it is imperative for citizens to actively engage in shaping the future of their country’s healthcare through public participation processes.