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Ministry of Health postpones SHIF contributions rollout to resolve stalemate

Reprieve for Kenyans workers as Ministry of Health delays contributions to SHIF which were scheduled to start on March 1

Health CS Susan Nakhumicha during a meeting in her office at Afya House

The Ministry of Health under Cabinet Secretary, Susan Nakhumicha, announced changes in the timeline for the implementation of the Social Health Insurance Fund (SHIF).

Initially set for a March 2024 kickoff, contributions to SHIF are now rescheduled to start in July 1, 2024.

This delay comes as the Health Ministry opts for further consultations with the Council of Governors.

SHIF, a brainchild of President William Ruto’s administration, is poised to replace the longstanding National Health Insurance Fund (NHIF) as part of a broader strategy to achieve Universal Health Coverage (UHC) in Kenya.

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The initiative mandates a 2.75% monthly income contribution from every Kenyan household, aiming to harness over Sh57 billion annually, primarily from the informal sector, to fund the country's healthcare needs​​​​.

Health CS Nakhumicha highlighted the need for comprehensive regulations that ensure SHIF's successful implementation, emphasizing the role of public participation and legislative approval in this process​​.

This development follows meticulous planning by the Ministry of Health and NHIF actuaries, who conducted an in-depth analysis to establish the 2.75% contribution rate.

This rate was carefully chosen to rectify the disparities observed in the NHIF system, where lower-income earners disproportionately bore the healthcare financing burden. The shift to SHIF aims to create a more equitable system, ensuring that contributions are fairly distributed across different income levels​​.

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Moreover, the establishment of a 10-member transition committee, chaired by Kap-Kirwok R. Jason, signifies the government's proactive steps towards a seamless transition from NHIF to SHIF.

This committee is tasked with guiding the operational framework of SHIF, ensuring that the fund addresses the healthcare needs of all Kenyans, both salaried and unsalaried, with contributions set at 2.75% of monthly income for the employed and a minimum of Sh300 for the unemployed​​.

The Council of Governors (CoG) earlier in February voiced its opposition to the revenue-sharing proposals made by the Kenya Kwanza administration, arguing that the suggested budget allocations from the National Treasury and the Commission on Revenue Allocation (CRA) do not adequately meet the needs of the counties.

The CoG's concerns center around the need for the new Social Health Insurance Fund (SHIF), the National Social Security Fund (NSSF), and the currently suspended housing levy to be included in the revenue-sharing formula, highlighting that counties, as employers, are subject to these deductions.

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Despite engaging in discussions with representatives from the National Treasury and CRA through a dedicated task force, the CoG reported that there remains a significant gap between their proposed figures for shared revenue and those proposed by the government bodies.

Specifically, the CoG is advocating for an allocation of Sh450 billion to counties, which is substantially higher than the Treasury’s offer of Sh398.14 billion and the CRA's suggestion of Sh391 billion.

This stance is driven by several factors, including the necessity to account for annual salary increments for county employees, the need to adjust for revenue growth, and to buffer county governments against inflation and rising operational and maintenance costs.

The CoG, led by Chairperson Anne Waiguru, who is also the Governor of Kirinyaga, urged the National Government to reconsider its position to ensure that counties can effectively fulfill their responsibilities and deliver services efficiently.

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