Unpacking Benefits and Challenges of Kenya’s New Social Health Insurance

The controversial Social Health Insurance Act (the Act) replaced the longstanding 58-year-old National Hospital Insurance Fund (NHIF) to introduce Social Health Insurance (SocHI). It was enacted in October and scheduled to commence in November 2023. However, it’s implementation faced a temporary setback when the High Court suspended it following a constitutionality challenge over certain sections.

Just recently, the Court of Appeal lifted the conservatory orders suspending the implementation of the Act, paving way for imminent implementation. The draft regulations set to operationalize the Act are currently undergoing public participation with mandatory collections from formally employed persons expected to begin in March 2024. While SocHI promises comprehensive benefits, its not without its fair share of challenges. In this article, we delve into both the anticipated benefits and implementation hurdles affecting its rollout.

Implementation Hurdles: Challenges Affecting the Rollout of Social Health Insurance

1.???? Balancing Deductions and Benefits

The introduction of SocHI will result in a sudden rise in mandatory deductions for salaried employees. The deductions shall now be equivalent to 2.75% of their gross income, up from the previous capped amount of KES 1,700. While this adjustment is necessary to fund the expansion of healthcare coverage, it’s important to find a middle ground where the financial impact on individuals does not outweigh the expected benefits.

Capping the deductions is advisable to minimize the impact on disposable income for low and middle-income earners and prevent an adverse effect on the economy. For instance, deductions based on net income would lighten the burden, but it may be worth considering other equitable options, such as capping deductions at a 100% increase from previous deductions per individual or adopting graduated increases similar to recent NSSF (public pension fund) adjustments.

2.???? Policy Testing and Effective Implementation

Given the radical changes introduced by SocHI, a phased implementation approach would have been ideal. Pilot programs, akin to those previously conducted in revamping NHIF, would have effectively demonstrated the Act's impact. However, in this case, rigorous policy testing - effective in assessing the impact of new laws and mitigating potential issues has not been conducted.

Ensuring a seamless start is therefore critical for building public confidence in the new SocHI. The newly formed Social Health Authority (Authority) must prioritize transparency and good governance. The outgoing NHIF was riddled with controversies surrounding revenues, asset management, fiduciary mischief, questionable expenditure and misappropriation of public funds.

3.???? Continuous Public Participation

The roll out of SocHI offers an opportunity for public participation on an active rolling basis to address arising concerns and refine the system based on real-time feedback. This would showcase government’s commitment to constitutional values, allow Kenyans to discover the benefits offered by the three new funds and enhance confidence in the new SocHI environment, potentially boosting contributions.

4.???? Civic Education

Engaging citizens in robust civic education on the new SocHI is paramount to foster awareness, address concerns about increased deductions and highlight expected positive impacts. Civic education campaigns play a vital role in informing the public about changes, dispelling misconceptions, facilitating constructive discussions and building a sense of ownership among citizens. For instance, the Ministry of Health (MoH) should put up a Frequently Asked Questions (FAQs) section on its website and run campaigns to address emerging issues.

Anticipated Benefits of Social Health Insurance

1. The Three funds: Enhanced Benefits and Services

Users can expect enhanced healthcare services covering a broader spectrum of treatments and medical interventions facilitated by three new funds whose efficient administration, coupled with timely claims management is set to ensure users’ diverse healthcare needs are met.

a)??? Primary Healthcare Fund: covering services like screening for common health issues, routine physical examinations and education that promotes health and health seeking behavior.

b)??? Social Health Insurance Fund: the core fund with mandatory registration and contributions covering most disease areas based on established tariffs; and

c)??? Emergency, Chronic and Critical Illness Fund: covering the cost of management of chronic illnesses, once the SocHI cover is exhausted.

2. The Dispute Resolution Tribunal

The Authority’s board will be responsible for managing functions like healthcare provider selection, beneficiary registration, fund management and handling implementation-related complaints. Appeals against the board’s decisions, with further appeals possible at the High Court, can be made to the new dispute resolution tribunal which may review, revoke, or uphold board decisions.

The Tribunal is a new and welcome addition anticipated to handle potential disputes arising from teething problems in the implementation of SocHI. Having a dedicated avenue for these disputes ensures swift resolution, enhancing service provision under the SHI. The tribunal's ability to issue interim reliefs, including injunctions in emergencies is laudable but its jurisdiction to adjudicate disputes under the Act without pecuniary limits requires express provisions in the regulations.

3. Empanelment of Facilities

Empanelment of healthcare providers into the list of healthcare service facilities shall be approved by the Board. The Authority will receive and review applications but providers must undergo accreditation by a body identified by MoH. Successfully empaneled providers will be published in the Kenya Gazette and the Authority’s website with the same applying when the delegated accrediting body revokes empanelment. Contracting shall be undertaken in accordance with the provisions of the Public Procurement and Assets Disposals Act. Streamlining the process with a process tailor made for health care providers could simplify the process.

4. Universal Coverage

SocHI aims to offer quality, affordable and accessible healthcare for all Kenyan citizens, irrespective of their socio-economic status by reducing contributions from marginalized individuals and families. While monthly self-payments posed challenges under NHIF, a one-off annual payment for individuals in the informal sector has been introduced to address this. However, collecting annual contributions from those struggling with monthly payments may be challenging due to competing financial burdens. This will pose challenges for effective financial planning.

Conclusion

As we anticipate the Act’s full implementation, it’s crucial to recognize the positive impact SocHI is poised to have on the health and well-being of Kenyans. This monumental step towards universal health coverage aligns with global healthcare trends and positions Kenya at the forefront of progressive and inclusive social healthcare.

However, as this transition marks a crucial moment in Kenya's healthcare evolution, the highlighted emerging implementation challenges require careful consideration and necessary adjustments made to allay the concerns. As the roll out of the regulations under the Act continues, MoH is intensifying public participation and stakeholder engagement. Your involvement is crucial in in the roll out of a new SocHI model in Kenya.