SHA tax to raise Sh148 billion in one year— Health ministry

The new health scheme has projected it will collect at least Sh148 billion every year to fund improved services.

Every Kenyan household will pay 2.75 per cent of its income to the fund every month, beginning next month.

The projected collections double the annual collections by the National Health Insurance Fund, which raised Sh82.1 billion in 2022/2023 and paid out Sh74.2 billion in claims.

The new Social Health Authority will replace the NHIF from next month.

“The yield we expect in one year is about Sh148 billion although it might vary depending on how Kenyans in the informal sector contribute,” Medical Services PS Harry Kimtai said.

Kenyans who are not in formal employment will fill out a questionnaire to determine their annual income. They will then pay 2.75 per cent of this income, but not less than Sh300 every month.

PS Kimtai spoke at a media briefing in Nairobi on Tuesday.

SHA will have three funds. The first, the primary healthcare fund, will be paid for by the government.

This fund will cover services offered by community health practitioners and in dispensaries and health centres.

These are basic services such as screening for diseases, lab tests and dispensing of some medicines.

Kimtai said they project the government will need to put in Sh8 billon every year to PHC for these services.

“All Kenyans seeking health services must enter the health system through the PHC, after which they will be referred to the level 4 and 5 facilities if necessary,” he said.

Services in levels 4 and 5 will be paid for through the second fund— the Sh148 billion Social Health Insurance Fund—for which Kenyans are paying 2.75 per cent of their income.

Nearly all services paid for through SHIF are capped. For instance, the benefits package shows hospitalisation is only for 50 days maximum.

Sick people who exhaust these limits can apply for more financing to the third fund known as Emergency, Chronic and Critical Illnesses fund.

This is not a contributory fund, the Treasury should put money into it every year.

MoH said it projects about Sh20 billion will be needed every year.

However, Treasury has only allocated Sh2.1 billion to this fund in the 2024/2025 proposed budget.

“We had an engagement with the Treasury and we agreed on Sh20 billion. The Sh2 billion is just a start. It will be increased based on need,” Kimtai said.

SHA chairperson Dr Timothy Olweny also noted the Sh2 billion mentioned last week by Treasury CS Prof Njuguna Ndung’u may not be adequate.

“The Sh2 billion is a commitment and we trust the funds will be  disbursed,” he said.

Acting SHA chief executive officer Elijah Wachira said they have already worked out a package of the benefits Kenyans will access through SHA.

The package includes treatment and costs. It is currently going through public participation.

Health CS Susan Nakhumicha said the current benefits have been enhanced and even health facilities will be paid more.

For instance, normal delivery was Sh5,000 in public facilities under NHIF. Now all facilities, whether public or private will be paid Sh11,200 under SHA,” she said.

The government will roll out mass registration of Kenyans to SHA starting July 1, 2024.

The Ministry of Health will lead the mass registration across all 47 counties and on all platforms.

During a Cabinet meeting chaired by President William Ruto last Tuesday, the Cabinet approved the framework for a full transition from the NHIF to the SHA beginning next month.

The Cabinet urged all Kenyans to register under the new scheme “in our nation’s historic endeavour to usher Kenya into the league of nations with healthcare for all”.

“Kenyans can register on the phone, at public hospitals and also by the 100,000 Community Health Promoters across the country,” a despatch from the Cabinet meeting stated.

Last week, Public Health PS Mary Muthoni said the NHIF is still active and in use before the Social Health Insurance Fund is fully rolled out.

Muthoni called for patience among Kenyans as the government works on the new health plan.