NHIF Sh500 scheme broke, MPs allege cover-up

Experts say NHIF 'captured' by service providers, paid three times more than poor pay in.

In Summary

•The experts' report proposes a complete overhaul of the fund, saying it will completely collapse by 2027 if nothing is done.

•Yesterday, National Assembly Health committee chairperson Sabina Chege called for immediate suspension of the rules.


NHIF head offices in Nairobi.
NHIF head offices in Nairobi.

The National Hospital Insurance Fund's Sh500 monthly voluntary scheme is broke, a report seen by the Star says.

That's the apparent reason for the harsh new rules for new voluntary members.  

A report by the panel on NHIF reforms shows the scheme, funded mostly by jua kali and other self-employed Kenyans, became a loss-maker last year. 

The report says NHIF has been "captured" by health service providers whom it pays three times more than it receives from poor Kenyans. 

The new rules require a Sh6,000 upfront payment for 12 months — they have three months to pay. Defaulters will pay a 5o per cent penalty for each month defaulted, for as long as 11 months. 

They will also pay a one-year advance and wait 30 days before getting any benefits. The rules target the Sh500 voluntary national scheme members.

The reform report proposes a complete overhaul of the fund, saying it will collapse by 2027 if nothing is done.

on Monday, National Assembly Health committee chairperson, Sabina Chege, said the NHIF board could have been trying to pre-empt an urgent overhaul when it announced tough new rules last week. 

We do not expect any resistance and the rules must be withdrawn immediately.
Sabina Chege, chairwoman of the National Assembly Health Committee

Chege told the Star the health committee will have special sitting on January 27, to discuss the controversial rules. She said the reforms panel, led by James Wambugu, had not yet presented its findings to the committee. 

"The fund must not try to implement any of those recommendations before our sitting," she said. 

The NHIF reforms panel was appointed by Health Cabinet Secretary Sicily Kariuki in February 2019 and presented its findings in October.

Chege confirmed the committee has written to the fund’s management asking it to suspend the rules immediately.

“We do not expect any resistance, and the rules must be withdrawn immediately,” Chege said.

“Parliament will open on February 15 but we have called a special committee sitting on January 27th to discuss this crisis,” she said."We expect the CEO to be present."

The Acting CEO Nicodemus Odongo yesterday did not confirm receiving the letter.

The new rules were announced on January 7 by the fund’s acting head of registration and compliance Robert Otom, in a memo addressed to regional and branch managers.

Over the years, NHIF has expanded its benefits package to attract more Kenyans.

It also runs 73 different schemes to remain afloat.

However, the reforms panel proposed NHIF quits commercial insurance and collapses all its 74 different schemes into only three — employer-paid scheme, a civil servants scheme and the tax-based scheme for the poor and Kenyans in informal jobs.

"The fund needs to be redesigned to improve efficiency. We have also proposed more effective oversight from the Ministry of Health, Parliament and counties," Wambugu, head of the reforms panel, told the Star in October last year.

(Edited by V. Graham)