How Does Social Health Insurance Fund in Kenya Work?

The Social Health Insurance Fund (SHIF) in Kenya is a comprehensive public health insurance service under government administration, established by The Social Health Insurance Act of 2023.

The Social Health Insurance Act of 2023, which introduces significant reforms to the organisation and delivery of health and care services in Kenya, received Presidential Assent on October 19, 2023.

The main purpose of the Act, commonly referred to as “SHIA,” is to establish a legislative framework aimed at achieving Universal health coverage (UHC) that will improve the fairness, quality, and affordability of public health insurance coverage and make primary and preventive health care services available to a diverse patient population without considering age, financial circumstances, family situation, or living arrangements.

At the heart of the changes brought about by SHIA is the ultimate permanent replacement of the National Health Insurance Fund (NHIF), the state parastatal responsible for the public healthcare sector of Kenya since its establishment in 1966.

Unlike NHIF, SHIF targets primarily low- and middle-income individuals and families because they constitute the vast majority of the uninsured. When fully implemented, SHIF will make health insurance coverage a legal expectation on the part of Kenyan citizens and those who are legally present.

For the most part, NHIF gave healthcare entitlement to employed individuals, especially civil servants, who were automatically active contributors to the scheme. SHIF is different as the government will be making strategic investments in public health through the expansion and, subsequently, citizens’ access to clinical preventive care thanks to its three special funds, the Primary Healthcare Fund, E*******y, Chronic and Critical Illness Fund and the Social Health Insurance Fund.

Let’s look at the differences and similarities of SHIF and NHIF in brief:

SHIF vs NHIF: Registration

In expanding existing government health insurance coverage, SHIF fundamentally restructures NHIF to cover all citizens and everyone living lawfully in Kenya.

“A person who, being a non-Kenyan, and is ordinarily resident in Kenya, shall be eligible for registration as a member of the Social Health Insurance Fund,” the Act says.

While all Kenyans above 18 years are eligible to register for NHIF membership, SHIF registration is mandatory for all citizens, and enrollment will begin from birth for all children born after the operationalisation of SHIF later in October.

A person currently registered as a member of the repealed National Health Insurance Fund shall register afresh with the Authority as a member of the Social Health Insurance Fund.

SHIF vs NHIF: Beneficiaries

In healthcare, a beneficiary can refer to individuals enrolled in a health insurance plan who are eligible to receive benefits through the policy in the form of paid claims, among other benefits.

In both SHIF and NHIF, the beneficiaries are the contributors, spouses of the contributors, those who have not attained the age of 21 years with no income of their own and living with the contributor, those who have not attained the age of twenty-five years and are undergoing a full-time course of education at a university or college and people who are living with disability and are wholly dependent on and living with the contributor.

SHIF vs NHIF: Dependents

According to a memo that took effect in January 2020, the maximum number of dependents on your NHIF card is six: your spouse and five children.

However, on SHIF, the government has confirmed that Kenyans can register an unlimited number of dependents per household so long as they are part of the principal member’s nuclear family, which includes legally declared spouse(s) and children.

SHIF vs NHIF: Cost differences

When it becomes active, SHIF will make significant changes in coverage, premiums and cost-sharing due to its Social Health Insurance Act, which is looking to realign the public healthcare system for long-term changes in healthcare quality, benefits covered, sources of financing, and payments to medical care providers.

Because SHIF is centred on extending coverage to the uninsured, the minimum contribution to the scheme was lowered to Ksh300 from the Ksh500 monthly contribution by every registered self-employed NHIF member.

Salaried NHIF members used to make contributions as per a graduated salary scale ranging from a minimum of Ksh150 to a maximum of Ksh1,700, but SHIF has a standard rate which will be capped at 2.75% of their salary plus other side deductions that their employers are going to make to the Primary Healthcare Fund for purchase of primary healthcare services from primary healthcare facilities.

Have a look at a comparison of contributions of SHIF and NHIF for various salary bands in Kenya:

Gross salary Current NHIF deductions SHIF deductions
Ksh20,000 Ksh750 Ksh550
Ksh50,000 Ksh1,200 Ksh1,375
Ksh100,000 Ksh1,700 Ksh2,750
Ksh250,000 Ksh1,700 Ksh6,875
Ksh500,000 Ksh1,700 Ksh13,750
Ksh1 million Ksh1,700 Ksh27,500
An employer shall deduct the contribution of a salaried contributor and submit the contribution to the Authority on behalf of the employee at the rate provided by the ninth day of each month.

In the case of a household whose income is not derived from salaried employment, an annual contribution of a proportion of household income as determined by the Authority will be made monthly.

A person shall only access healthcare services under SHIF when their contributions to the Social Health Insurance Fund are up to date and active. 

—Source: Business Daily 

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