Introduction
Since its establishment in 1966, the National Hospital Insurance Fund (NHIF) has played a pivotal role in financing healthcare in the country. Originally, NHIF was designed to cover citizens with a regular income. Consequently, it excluded a significant portion of the population from obtaining health insurance. Although efforts were made to expand coverage to the informal sector, there has been low uptake.
In 2022, only three (3) out of every ten (10) citizens were covered under NHIF. To overcome the implied gap, a transformative shift towards the Social Health Insurance (SHI) was legislated in 2023, which advocated for the establishment of a Social Health Insurance Fund. This strategic move was aimed at promoting the implementation of universal health coverage by ensuring all individuals and communities receive the health services they need, including the full spectrum of essential, quality health services from health promotion to prevention, treatment, rehabilitation, and palliative care without suffering financial hardship. In addition, the government is committed to improving the quality of life for all citizens by providing equitable, accessible, affordable, and high-standard healthcare.
The Universal Health Coverage (UHC) programme, an integral part of the Bottom-up Economic Transformation Agenda (BETA), underscores the significance of social health insurance in achieving the UHC goals. This policy blog focuses on the important areas to consider for effective implementation of the social health insurance in the country.
Social Health Insurance (SHI)
The Social Health Insurance (SHI) system in Kenya operates through individuals contributing funds to a common pool through regular premiums, deducted from salaries or paid directly, to finance care services for themselves and their dependants. Governed by the Social Health Insurance Act (SHIA) of 2023, SHI introduces three funds: the Primary Healthcare Fund, the Social Health Insurance Fund (SHIF), and the Emergency, Chronic, and Critical Illness Fund.
The Primary Healthcare Fund, detailed in Section 20 of the SHIA, focuses on procuring primary healthcare services from health facilities. It is funded through various sources, including appropriations by the National Assembly, grants, gifts, donations, bequests, fees, levies, and funds from other relevant sources. Unlike NHIF, SHI aims to remove limitations on specific medical expenses, such as pre-treatment blood works and certain CT scans, and includes coverage for congenital conditions and preventive measures not previously covered.
The Social Health Insurance Fund (SHIF) under SHI proposes a contribution of 2.75 per cent of gross salary or wages to promote equity among earners at different income levels. This contrasts with NHIF’s fixed contribution rate of Ksh 1,700, which results in a higher percentage contribution from low-income earners and a significantly lower percentage from high-income earners. SHIF also aims to reduce contributions from informal workers, who constitute 83 per cent of the population, from Ksh 500 to Ksh 300 per month, thus expanding coverage in the informal sector.
The Emergency, Chronic, and Critical Illness Fund, established under Section 28 of the SHIA (2023), covers costs related to managing chronic illnesses after the depletion of social health insurance cover and funds emergency treatment. In contrast, NHIF provides general health insurance coverage for various medical needs. The Emergency, Chronic, and Critical Illness Fund has diverse funding sources, including appropriations by the National Assembly, gifts, grants, donations, endowments, or funds from any other lawful source.
Together, these funds signify a significant advancement towards a more inclusive, accessible, and sustainable healthcare landscape in the country. The potential benefits include improved primary healthcare services, comprehensive social health insurance coverage, and dedicated provisions for managing chronic illnesses and emergencies.
Lessons from Global SHI Models
The global healthcare financing models offer valuable insights into optimizing Kenya’s Social Health Insurance Fund (SHIF). These models include India’s National Health Protection Scheme (NHPS), South Africa’s National Health Insurance (NHI), Taiwan’s National Health Insurance (NHI), and Norway’s National Insurance Scheme (NIS), which have established legislative frameworks to govern their healthcare financing schemes. These frameworks provide the necessary structure and jurisdiction for the management and control of their social health insurance programmes.
India’s NHPS and South Africa’s NHI target inclusivity by offering healthcare coverage to low-income individuals, including those in the informal sector. This ensures quality care regardless of socio-economic status. Taiwan’s NHI mandates enrollment for all citizens and residents, facilitating broad fund collection and risk pooling. Similarly, Norway’s NIS incorporates informal sector workers through tax-funded contributions, providing extensive healthcare benefits to all citizens.
These countries fund their schemes through a combination of beneficiary contributions, taxes, and government allocations. This multi-tiered funding model allows for equitable distribution of financial responsibility among stakeholders while ensuring adequate resources for the provision of comprehensive healthcare services.
The covered aspects of health in these countries include in-patient and out-patient care, prescription drugs, dental care, and specialized treatments such as HIV/AIDS and organ transplants. The goal is to provide comprehensive coverage for essential healthcare needs, promoting health and well-being across all segments of society.
To mobilize citizens, these countries use public awareness campaigns, mandatory enrollment, and taxation. These efforts aim to promote universal healthcare coverage and ensure that all citizens have access to quality healthcare services, regardless of their income or social status.
While these models do not have multi-layered funds such as Kenya’s SHIF, their approaches ensure comprehensive healthcare services for all citizens. Kenya could learn from these global examples to enhance its SHIF and achieve its goal of providing accessible and affordable healthcare for all.
Towards effective implementation of Social Health Insurance in Kenya.
To ensure the successful implementation of Kenya’s Social Health Insurance (SHI) programme, it is crucial to draw lessons from global benchmarks. Extensive awareness campaigns, such as those executed in India, have the potential to propagate knowledge on the advantages of SHI throughout both the formal and informal sectors. India’s National Health Protection Scheme (NHPS), launched under the Ayushman Bharat National Health Protection Mission, used various communication platforms and engaged community leaders to improve public comprehension and promote ongoing awareness. These campaigns not only educate the public but also help build trust in the system, encouraging more people to enrol.
Technology integration, as seen in Taiwan, is essential for overcoming technological restrictions and ensuring seamless operations. Taiwan’s National Health Insurance (NHI) programme implemented in 1995 uses advanced technology for enrollment, claims processing, and data management, resulting in efficient service delivery and reduced administrative costs. This includes alternative enrollment routes and digital literacy programmes to facilitate enrolment and access to services, ensuring that even those in remote areas can benefit from SHI.
Coverage of the informal sector is crucial for SHI’s success, as highlighted by South Africa’s National Health Insurance (NHI). Implementing participation and affordability measures, along with flexible contribution methods, can improve adoption rates among informal workers. South Africa’s NHI emphasizes the significance of providing sufficient coverage for informal workers, implementing variable contribution methods that accommodate the unpredictability of informal sector income. Collaboration with local communities for targeted outreach, such as strategies employed in India and South Africa, ensures that the unique needs of the informal sector are effectively addressed.
Enforcement mechanisms, as demonstrated by Norway, play a vital role in ensuring SHI’s effectiveness. Strict adherence to regulatory frameworks helps maintain the integrity of the system and ensures that all stakeholders comply with the rules and regulations. For example, Norway’s National Insurance Scheme (NIS) enforces tax-funded contributions, with higher income earners contributing more, ensuring equitable financing for universal healthcare coverage.
These lessons highlight the importance of not only designing a robust SHI framework but also implementing it effectively through awareness, technology, inclusive coverage strategies and enforcement.
Conclusion and Recommendations
Implementing Social Health Insurance (SHI) in Kenya requires a comprehensive approach, including awareness campaigns, technology integration, informal sector coverage, and enforcement.
Extensive awareness campaigns could help educate the public about the benefits of SHI and build trust in the system, encouraging more people to enrol. It is vital for the government to leverage various communication platforms and engage community leaders, which is crucial in reaching both formal and informal sectors of the population.
Technology integration is essential for overcoming technological restrictions and ensuring seamless operations. The government could invest in advanced technology for enrollment, claims processing, and data management to improve service delivery and reduce administrative costs. Additionally, alternative enrollment routes and digital literacy programmes need to be implemented to ensure that even remote areas can benefit from SHI.
There is need for the country to implement participation and affordability measures, along with flexible contribution methods, to improve adoption rates among informal workers. Collaboration with local communities for targeted outreach will be essential in addressing the unique needs of the informal sector.
The government could enforce strict adherence to SHI regulatory frameworks to maintain the integrity of the system and ensure compliance with rules and regulations. Tax-funded contributions, with higher-income earners contributing more, can ensure equitable financing for universal healthcare coverage.
In conclusion, Kenya can enhance the accessibility, inclusivity, and effectiveness of its SHI programme designing a robust SHI framework and implementing it effectively through awareness, technology adoption, inclusive coverage strategies and enforcement. By doing so, Kenya could advance towards universal healthcare coverage and improve the health outcomes of the entire population regardless of their socio-economic status.
Author: Dire Dika, Policy Analyst, Governance Department, KIPPRA
