Goodbye to NHIF: A New Era of Health Coverage in Kenya…

In a month’s time, Kenya will transition from the National Health Insurance Fund (NHIF) to the Social Health Authority (SHA), a significant move towards achieving universal health coverage for its citizens and residents. The NHIF has long been a cornerstone of Kenya's healthcare system, providing affordable and accessible health insurance to the populace.

Schemes

Established in 1966 under the Ministry of Health, NHIF initially served as a contributory hospital-based cover for formally employed workers earning over KES 1,000. In 1972, it introduced a voluntary contributory scheme to include those earning below KES 1,000 and the self-employed.

Currently the NHIF runs several schemes as below:

• National Health Scheme (NHS): dubbed as “Supacover”, this is the default scheme, with membership being from both statutory (employed) and voluntary. It covers inpatient, outpatient services and special benefits packages. Voluntary contributors paid KES 500 (USD 3.78) monthly whereas statutory contributions are 1.7% of income to a maximum income of KES 100,000 (USD 756)
• Enhanced schemes: These negotiated comprehensive covers include:
• Linda Mama: started in 2017 offering free maternity services which were previously introduced in 2013 and were then administered by the Ministry of Health
• Edu Afya: comprehensive medical scheme for students in public secondary schools

Benefits

One of NHIF’s primary objectives is to ensure that all Kenyans have access to healthcare. Over the years, NHIF has expanded its coverage to include a wider range of services and cater to various demographics, including informal sector workers and dependents. In April 2015, the NHIF increased contribution rates for its national scheme members, to account for increased cost of service provision and to expand the benefit package. This was a graduated scheme that expanded contributions based on income:

The current overall benefit package for the NHIF scheme is as below:

Performance

NHIF has seen significant growth in revenue, membership, and coverage. Contributions have grown eight-fold over a decade, from KES 10 billion (USD 76.6 million) in 2012/13 to KES 82.1 billion (USD 620 million) in 2022/23. This growth is largely due to negotiated schemes, which saw contributions rise from KES 10 billion in 2017/18 to KES 35.1 billion in 2021/22:

Financial Sustainability

NHIF’s financial sustainability is crucial for its ability to cover healthcare costs effectively. Recent reports highlight challenges such as delays in reimbursements to healthcare providers and allegations of mismanagement, which strain NHIF's resources and erode public trust.?

Over the past five years, different schemes within NHIF have shown varying levels of efficiency, revealing cracks in its sustainability.

The national scheme has had high payouts, always above 80%, with a high of 123% in 2018/19.

Similarly, negotiated schemes have seen payout ratios rise from 78% in 2017/18 to 104% in 2021/22.

Membership

Principal membership in NHIF has grown from 4 million registered members to 9.5 million. Notably, the number of informal sector members surpassed formal sector members in 2019/20. The switch to SHA aims to significantly increase enrolled members and expand the risk pool, ensuring the fund can provide effective insurance coverage without facing bankruptcy.

Conclusion

The transition from NHIF to the Social Health Authority marks a pivotal moment in Kenya’s journey towards universal health coverage. While NHIF has made substantial strides in expanding healthcare access and coverage, its sustainability challenges and service delivery issues highlight the need for reform. SHA presents an opportunity to build on NHIF’s successes, address its shortcomings, and create a more efficient, equitable, and sustainable health insurance system for all Kenyans. However, the success of this transition will hinge on addressing the systemic issues that plagued NHIF, including delays in reimbursement and allegations of mismanagement.?

As we bid farewell to NHIF, the focus now shifts to ensuring that SHA meets its mandate and delivers on the promise of universal health coverage, securing a healthier future for the nation.

References

Barasa, E. (2018). Kenya national hospital insurance fund reforms: Implications and lessons for universal health coverage. Health Systems & Reform, 4(4). https://doi.org/https://doi.org/10.1080/23288604.2018.1513267

Beckman, T. (n.d.).

Keko, S. (2022, December 22). Schemes. National Health Insurance Fund. https://www.nhif.or.ke/schemes/

KISIA, A. (n.d.). EXPLAINER: Difference between NHIF and social health insurance fund. The Star. Retrieved May 29, 2024, from https://www.the-star.co.ke/news/realtime/2024-01-22-explainer-difference-between-nhif-and-social-health-insurance-fund/

NHIF. (2021, January 28). About us. National Health Insurance Fund. https://www.nhif.or.ke/about-us/

Sector budget proposal reports – the national treasury. (n.d.). Retrieved May 29, 2024, from https://www.treasury.go.ke/sector-budget-proposal-reports/