Health Cabinet Secretary Susan Nakhumicha on Wednesday, January 24, revealed the rationale behind deducting 2.75 per cent of every Kenyan’s gross income to contribute towards the Social Health Insurance Fund (SHIF).
Speaking during an interview with Citizen TV, Nakhumicha explained that the percentage was proposed by actuarial scientists domiciled at the Ministry of Health.
She explained that the scientists calculated the percentage based on the money needed to fund all public health facilities in Kenya.
“First we looked at the baseline. We took into consideration the existing National Health Insurance Fund (NHIF) and what were the ranges of payment,” she explained.
“When we looked at it, the person who was paid the most is anybody earning Ksh10,000 and below.”
According to the CS, this category was being deducted up to 5 per cent towards NHIF while top earners paid a negligible amount.
Giving an example of President William Ruto, she explained that the Head of State was paying as little as 0.01 per cent of his gross income towards NHIF.
CS Nakhumicha remarked that the Ministry decided to rectify the unfairness and make sure there were constant percentages in terms of deductibles.
To settle on the constant percentage, the actuarial scientists were presented with data on how much funding health facilities needed.
At the tertiary level, which consists of Level 6 Hospitals, the Health Ministry needs to spend Ksh46 billion to ensure health services are provided uninterrupted.
“Secondary level consisting of Level 4 and 5 we found Ksh130 billion was needed while primary level consisting of community health promoters and Level 1 and 2 hospitals need Ksh80 billion,” the CS explained.
Based on those calculations, the actuaries arrived at 2.75 deductions on gross income as revealed by the CS.
The minimum mandatory contribution towards SHIF will be Ksh300 and unlike in the past when NHIF targeted salaried employees, the new deductions will be mandatory for every Kenyan.
Vulnerable households who cannot afford the minimum mandatory deductions will have their contributions covered by the national government.
