Employees to save Sh8.5bn in NHIF reliefs

 NHIF Building in Upper Hill, Nairobi. FILE PHOTO | NMG

By JOHN MUTUA
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Employees will from January 1 enjoy a 15 percent relief on their monthly contributions to the National Hospital Insurance Fund (NHIF) in changes that will deny the insurer an estimated Sh8.55 billion annually.

The relief will see employees who pay a maximum of Sh1,700 per month get back Sh255 following amendments to the law passed in July through the Finance Act, 2021.

Voluntary contributors who are drawn from the informal sector pay Sh500 a month.

NHIF’s revenues from premiums wil take a hit from the relief and pile pressure on its ability to fund treatment of diseases amid the rising cost of hospitals.

The State-backed insurer collected Sh52.04 billion in the year to June meaning that it will lose up to Sh8.55 billion under the changes.

The relief is aimed at encouraging more Kenyans to enroll with the NHIF and boost the State’s bid to provide universal healthcare.

“The relief is bound to encourage more NHIF remittances and simultaneously aid the government in attaining its Universal Health Coverage (‘UHC) agenda,” audit firm Deloitte said in its review of the changes.

The changes will squeeze NHIF’s funding pool given that the State-backed insurer is also grappling with rising treatment costs, increase in fraudulent claims and incidences where members stop contributions after getting treatment.

NHIF’s payouts have more than doubled in five years from Sh19.7 billion in the year to June 2016.

The insurer paid out Sh54.6 billion or 88.7 percent as claims to hospitals in the year ended June 2021 highlighting the pressure on its revenues.

Besides increase in treatment costs, NHIF loses an estimated Sh16 billion to fraudulent claims every year highlighting the huge costs of the malpractice.