NHIF RATE MAY JUMP TO SH3,885

KENYANS may have to pay up to Sh3,885 per month for their health insurance if the recommendations of a strategic review of the National Hospital Insurance Fund report are adopted. A new report proposes that everyone earning Sh15,000 and above should contribute Sh3,885 per month up from the current monthly contribution of Sh320. The majority of those in formal employment fall into this bracket. If the recommendations are implemented, Kenyans will pay even more than the controversial rates that were put on hold in May. A strategic review on NHIF by Deloitte Consulting has cited increased inflation, rising medical costs, and increasing population as the main reasons why Kenyans should pay more each month for health insurance.

According to the report, those earning below Sh6,000 should contribute between Sh364 and 1,457. Previously, this group was to contribute Sh150. They currently pay between Sh30 to Sh120. Those earning from Sh6,000 to Sh10,000 should contribute between Sh1,700 and Sh2,428. Previously this group was to contribute Sh300 to Sh400. Those earning between Sh10,000 and Sh15,000 should contribute between Sh2,671 and Sh3,643 according to Deloitte. Previously this group was to contribute Sh400 to Sh500. They contributes from Sh180 to Sh 00.

NHIF earlier proposed that those earning between Sh15,000 to Sh50,000 should contribute between Sh600 and Sh1000 while those earning above Sh50,000 were to contribute Sh1,500. Those earning above Sh100,000 were to contribute Sh 2,000 as per the rates suspended in May. “It should be noted that for all income ranges, the inflation adjusted NHIF rate is greater than current NHIF rates and the proposed new NHIF rates. A review of the current NHIF rates therefore needs to be considered particularly if NHIF intends to improve the level of rebates to members and provide a coverage that relates to current medical costs,” the report reads.

The report was completed towards the end of 2011 and was prepared for the International Finance Corporation under a joint cooperation agreement with the Ministry of Medical Services and the NHIF. In an interview with the Star, Medical Services minister Anyang Nyong’o said the ministry will go ahead and implement the rates suspended in May and may increase further as per Deloitte’s recommendations.

He revealed that the ministry already prepared a Cabinet memo detailing the Deloitte recommendations. “We had proposed that in our new proposed scheme that the highest contributor would contribute 2000 shillings and the lowest contributor 150 shillings. We knew given the size of contributors we knew we could offer outpatient cover,” said Nyong’o. When asked whether Kenyans will see a review of the new proposed rates, he said, “Yes, definitely, I have prepared a memo to cabinet that also included a Bill on amendment of the NHIF Act.”

The report also recommends that NHIF reduce its costs since it is currently spending 45 percent of the contributions received on administration. Only 55 percent is what is paid out to purchase healthcare services from providers. “To allow the Fund to optimize and maximize the collected contributions on the purchasing healthcare, NHIF must relentlessly focus on reducing its administrative costs,” the report notes. It recommends NHIF to utilize better its office space noting that currently each employee uses an average of 436 square feet. “NHIF could earn Sh 7.5 million (Sh 90 million p.a) if they occupied 40ksqft based on an average of 150 sq ft,” the report indicates. The report also recommends a human resource management rationalization at NHIF to ensure more cost efficient utilization of staff and increased staff productivity.