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Health CS: Why 2.75% SHIF salary deductions start in March but services start in July

Health CS explains why 2.75% SHIF deductions will start 5 months before rollout of health care services under the new body

President William Ruto and Health CS Susan Nakhumicha at State House, Nairobi

Health CS Susan Nakhumicha has announced that Kenyans should expect salary deductions for the new Social Health Insurance Fund to begin in March 2024.

Speaking on Wednesday, Health CS Susan Nakhumicha said that once the SHIF regulations are gazetted on March 8, Kenyans will begin contributing at the end of the month.

The new regulations will require employed Kenyans to contribute 2.75% of their monthly income to the new fund that will replace the National Hospital Insurance Fund.

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“We gazette the regulations hopefully on Friday. Once they are gazetted, they come into effect so that means deductions begin at the end of March, 2.75% of income,” the CS said while speaking in Kisumu.

She added that despite deductions kicking off in March, Kenyans will have to wait until July to access the benefits of the newly created SHIF.

Earlier in February, it had been reported that the deductions had been postponed to July, but the CS has now clarified that the contributions kick off in March.

“In terms of access to services, because we need to register people, we need to collect the contributions and then prepare to provide the service. Our projection is that from March, we need about 3 months to prepare ourselves because we need a digital system to do registration, we need to test it and collect resources.

"Effective the new financial year which is July, now Kenyans can begin to access services under the Social Health Authority,” she said.

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According to the Ministry of Health, the SHIF will help vulnerable Kenyans gain access to a broad spectrum of benefits, including screening, dialysis, kidney transplants, essential medications, and vital medical equipment.

The High Court is set to provide directions in a case challenging the Social Health Insurance Fund on March 12

Activist Enock Aura initiated the case, prompting Justice Alfred Mabeya to schedule a date for proceedings after assembling a three-judge panel.

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Chief Justice Martha Koome assigned Justice Mabeya, alongside Justices Robert Limo and Fridah Mugambi, to address the matter.

For non-salaried Kenyans (informal or cash-based sectors), the regulations outline that households falling into this category will be required to contribute 2.7% of their total household income to the SHIF.

The Social Health Insurance Authority will develop a method of determining the income of non-salaried households by collecting data from the households.

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Households which have an income will be required to pay their contributions fourteen days before the lapse of the period for which the insurance is supposed to cover.

Those unable to pay the money as determined by the authority shall have access to loans to help them meet the cost.

All unemployed Kenyans will be required to pay the base rate of Sh300 per month to access healthcare.

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Those without income and are above 25 years will be treated as separate households, even though they are living with a contributor.

"A person, who has attained the age of twenty-five years and has no income of his or her own or is living with the contributor shall be treated as a household separate from the contributor and shall pay Kenya shillings three hundred Sh300 per month," the regulations state.

Take for example a family where 2 unemployed children above 25 are living in their parents' home. The two will be required to make individual payments of Sh300 each per month as they will be both treated as different households.

In cases where financial constraints prevent the household from paying contributions, the government has committed to meeting the cost of their obligation.

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Households that demonstrate an inability to cover SHIF costs will have their expenses incurred by the government, ensuring essential health access for vulnerable populations.

Additionally, persons under lawful custody can find solace in the regulations, as the Ministry of Interior will cover their health costs, contributing to an equitable and inclusive healthcare system.

According to President Ruto, the ambitious program aims to lift the burden of paying hefty hospital bills from many Kenyan households with a low income.

On November 23, he said that statistics show low health insurance coverage in Kenya at only 26%.

Those at the bottom of the economic pyramid have the least coverage of less than 5%.

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