NHIF freezes new rates on fresh court cases

The National Hospital Insurance Fund building in Nairobi. The insurer has been seeking to raise contributions by members to offer more comprehensive services. Photo/File 

By VICTOR JUMA
 

The bid by the National Hospital Insurance Fund (NHIF) to raise monthly contributions from this month has been suspended awaiting the outcome of three cases against the proposed new rates.

Simon ole Kirgotty, the managing trustee of the public health insurer said the fund has put on ice the new rates following the filing of two new court cases on top of an appeal by Federation of Kenya Employers.

Two contributors in Kisumu and Cotu moved to court after the dismissal of a suit opposing the new rates on January 25, which prompted NHIF to inform formal sector workers that they will start paying the higher fees from April.

“We now have three cases pending in the courts opposed to implementation of the new rates. We will have to wait their determination,” said Mr Kirgotty.

The mounting legal obstacles have extended a relief to employees who would have seen their monthly contributions rise by large margins from the current statutory rate of Sh320.

It however means that majority of poor Kenyans will continue to be locked out of affordable healthcare, a phenomenon that outgoing medical services minister Anyang’ Nyong’o sought to address with a stronger NHIF.

(Read: Formal sector workers to start paying new NHIF fees on April 1)

One of the petitioners is by the Federation of Kenya Employers (FKE), which is worried about NHIF’s capacity to run a large scale in-patient and out-patient service, among other concerns.

It remains to be seen whether Prof Nyongo’s replacement will pursue the agenda of universal healthcare in Kenya with the same zeal.

Under the proposal, formal sector workers earning a gross salary of Sh100,000 and above will make a monthly contribution of Sh2,000, up from the current Sh320. The scheme has a separate band for the self-employed, who will pay Sh500 per month for similar range of services.

FKE says the model as proposed by NHIF is faulty, arguing that the fund is pursuing a unilateral strategy without incorporating input from employers and workers.

“NHIF is a contributory members’ scheme and, therefore, cannot be used as a sole source for implementing a universal healthcare system for Kenya,” Jacqueline Mugo, the executive director of FKE said in a statement.

FKE argues that though the NHIF scheme is open to contributions from the informal sector, it is only guaranteed of steady contributions from about 2.128 million wage employees.

The federation says contributions from such a member base cannot sustain medical insurance cover for 40 million Kenyans.

FKE wants the proposed NHIF fees to be reviewed on a regular basis besides proposing that employers already running private medical insurance be given the right to opt out of the proposed universal healthcare scheme.
 
 

NHIF insists it has capacity for the bigger mandate, adding that the higher rates are necessary to meet the high cost of medical services. Its premiums were last reviewed in 1988 and since then, doctors’ fees, cost of food, medicine and equipment has risen significantly.

The proposed NHIF covers will, however, see the bulk of workers pay Sh12,000 per year or less, making it significantly cheaper compared to the annual insurance premiums charged by private insurers that cost an average of Sh20,000 per year