Kenyans without proof of National Hospital Insurance Fund (NHIF) membership will be locked out of government services under proposed rules that seek compulsory enrolment of every adult in the State-run medical scheme.
The NHIF says membership to the fund will be ranked equally with other State documents such as Kenya Revenue Authority (KRA) Personal Identification Numbers (PINs) when in search of government services.
This means that non-NHIF members will be barred from making critical transactions such as registration of land titles, approval of development plans, transfer and licensing of motor vehicles, and registration of business names and companies.
If accepted, those without active NHIF membership would also be cut from services such as underwriting of insurance policies, customs clearing, and forwarding, payment of deposits for power connections, supplying goods and services to the State, as well as opening accounts with financial institutions.
The government-backed National Hospital Insurance Fund (Amendment) Bill seeks to make it compulsory for every Kenyan above 18 years to contribute and be a member of the NHIF. They will be required to pay Sh500 monthly in a remodelled universal health coverage (UHC) scheme for outpatient and inpatient services, including maternity, dialysis, cancer treatment and surgery.
“We are looking at tying the active membership of NHIF to other services just like KRA PIN is for those going for things such as opening a business or seeking government tenders. This is one of the areas we are looking at once the law passes to encourage enforcement of the same,” NHIF chief executive officer Peter Kamunyo said.
“Let’s say you want to renew your driving licence or open an exhibition stall, you need certain licences from the government. To get these licences, part of the condition will be (to have) an active NHIF membership].”
Dr Kamunyo said the changes would be introduced as subsidiary legislation to the NHIF Act, which is set to be amended. The proposed changes are currently before Parliament.
The planned mandatory NHIF membership will be an upgrade of the scheme where only workers in the formal sector are compelled to join.
The review of the law will target more than 16 million adult Kenyans who are not covered by the NHIF.
Official data shows more than 25.36 million Kenyans are above 18 years and the NHIF has 8.898 million members.
The compulsory enrolment has the potential to make the NHIF the richest State-backed firm given that the proposed law will also require employers to match workers’ monthly contributions to the fund.
Doubling the Sh1,700 that top contributors make to the NHIF ranks high on the list of targeted changes to the NHIF Act.
The NHIF Act makes it voluntary for informal workers to join and contribute Sh500 monthly. Only those in formal jobs are compelled to contribute between Sh150 and Sh1,700, depending on the salary scale.
The requirement for proof of NHIF membership ahead of seeking State services is aimed at driving compliance for every adult to have insurance.
The Bill seeks to review the current Act where contributions are optional in a bid to sign up at least 16 million more Kenyans in a race to achieve health care coverage for everybody. It proposes that monthly contributions to the NHIF be reviewed every five years.
The NHIF last reviewed its rates in April 2015 and is seeking to increase its income to boost cover for diseases like cancer and offer health insurance to all Kenyans.
The push to make NHIF card rank equally as other state documents such as KRA PIN comes on the back of the fund revealing that 5.7 million Kenyans had defaulted on payments, including those that had been helped to foot hospital bills by the scheme.
President Uhuru Kenyatta is keen to deliver universal healthcare as his legacy project before leaving office next year and has already endorsed the Bill publicly, asking Parliament to pass it.
The number of voluntary contributors has jumped in recent years on the back of a mass recruitment drive. The drive was aimed at pushing Kenya towards universal health coverage and relieve citizens of the burden of out-of-pocket expenses.
The number of voluntary contributors rose from 1.99 million in 2015 to 4.54 million in June 2020 while that from the formal sector hit 4.45 million from 3.22 million.
The increase is also the product of increased inpatient and outpatient benefits enabling members to access dialysis, chemotherapy, radiotherapy, and theatre services.
However, 3.2 million members from the informal sector and 1.5 million from the formal sector have stopped remitting monthly premiums from the fund.
The NHIF says many Kenyans especially from the private sector register, pay for a few months, and drop of once they have received costly services such as surgery. The scenario — called adverse selection in insurance terms— is putting at risk the ability of the insurer to settle claims and meet administrative costs.
The NHIF collected Sh59.5 billion from the 8.998 million members in the year ended June 2020 and paid out Sh54.9 billion or 92.2 percent as claims to hospitals. Adverse selection refers to situations where an insurance company extends coverage to an applicant whose actual risk is substantially higher than the risk known by the insurance company.
“If we continue having adverse selection, the fund will not be sustainable since all the payouts we make are from the premium we receive,” said Dr Kamunyo.