Increasing Enrolment in Kenya’s Social Health Insurance: How Best It Can Be Done
Category: Social Health Insurance
By: Fiona Okadia,
While Kenya has long implemented the NHIF (National Hospital Insurance Fund) whose core mandate is to provide medical insurance coverage to all its members and their declared dependants and also to make medical care affordable, enrolment rates, particularly in the voluntary and informal sectors, remain low. Yet, NHIF is the most common type of health insurance in Kenya today. In 2022, it was ascertained that one in four persons in Kenya (26% of females and 27% of males) have some health insurance[1]. Furthermore, 6.2% of Kenyans spend at least 40% of their non-food income on health care, which indicates that the incidence of catastrophic health expenditures[2] in Kenya is around 6%. This fraction of the population is at risk of being impoverished by the utilization of health care. Large out-of-pocket health care expenditures are associated with a high level of borrowing, which reduces future consumption, and with depletion of assets and savings which reduces the households’ ability to shield themselves against events that reduce current consumption. Thus, catastrophic health expenditure potentially reduces the current and future well-being of households. The link between income poverty and access to quality health services is clear; there is thus a need to assist more Kenyans to have medical insurance as opposed to having them rely on out-of-pocket payments in the event of sickness.
In this piece, I propose interventions aimed at increasing households’ enrolment in the Social Health Insurance Fund (SHIF), recently established by an Act of Parliament. The Act emphasizes the importance of implementing policies that lead to compliance with the Act while ensuring that the enrolment is convenient and affordable to citizens.
- Using Schools as a Platform for Enrolment
Utilizing schools as a strategic platform for household enrolment emerges as a compelling approach, leveraging their extensive network and societal reach. Schools can serve as a focal point to facilitate the enrolment of uninsured children and households. The inherent advantages lie in the accessibility of schools, the established trust between parents and educational institutions, and ready communication channels on health needs that can be utilized by SHIF, the parents, and the Government. This communication mechanism should facilitate reimbursement of schools by SHIF for any proactive outreach and enrolment activities the schools might incur. This bottom-up approach to enrolment and collaboration would not only benefit students and their families by ensuring access to essential healthcare but also contribute to the achievement of overarching health objectives of the Social Health Insurance Fund.
The first justification for this approach is the fact that education has the first call on the national budget, as it accounts for the largest share of the public expenditure. The Teachers Service Commission (TSC), serving as a pivotal unit within the education sector, employs a significant portion of the public service labor force, precisely 37% (348,000)[3]. Acknowledging the centrality of education in the government’s service provision, aligning health enrolment efforts with educational institutions not only capitalizes on their accessibility by the general public but the alignment also taps into a sizable demographic group through a trusted and well-established network of public and private stakeholders in what the government’s work. This collaborative, integrated strategy of enrolment into SHIF presents an economically viable and socially impactful means to extend and enhance health coverage across all population groups.
Secondly, the strategy leverages a singular public service, accessed by 14.4 million Kenyans daily, encompassing 10.364 million children in primary schools and 4.4 million in secondary schools. These figures are readily available at the Kenya National Bureau of Statistics (KNBS).
Thirdly, the educational landscape comprises 27,174 pre-primary, 23,631 primary, and 9,247 secondary public schools in Kenya, totaling 60,052, which rises to 81,454, when private sector involvement across these categories[4] is factored in. Examining the budgets allocated to the education sector for FY 2021/22 and FY 2022/23, amounting to Ksh 107 billion and Ksh 134 billion respectively, underscores the substantial scale of this proposed enrolment platform[5].
The evidence available affirms the platform’s potential as an effective vehicle for advancing various social policies, notably broad-based enrolment into SHIF to make Universal Health Coverage (UHC) in Kenya a reality. By integrating the statistics on enrolment with other relevant data points, such as the average household size, which currently stands at 3.9 according to the latest 2019 Census, it is apparent that the proposed social infrastructure provides a practical means to capture a substantial percentage of the population into social insurance.
Kenya has the opportunity to develop a workable model of universal health coverage that other countries at comparable levels of socioeconomic development can adopt. However, to ensure its success, the government needs to delve into understanding the root causes behind the low enrolment rates in different parts of the country. Implementing a compulsory enrolment system, where, for instance, parents are mandated to provide evidence of annual enrolment effort (payment of premiums, children’s school attendance, participation in school-based health activities).
In this effort, SHIF should allocate resources to educational institutions, and facilitate the enforcement of mandatory enrolment for all citizens and residents. This particular effort might involve establishing social insurance offices at the sub-county level and collaborating closely with schools to ensure compliance with the enrolment guidelines. An essential monitoring and evaluation component of this strategy entails conducting a regular comprehensive cost-benefit analysis of the administrative activities of the Social Health Insurance Fund.
Such an approach should serve as a proactive investment in the nation’s health and social well-being. The upfront costs associated with the management of the approach can be justified by the long-term economic and societal benefits associated with UHC that ensures good health for all citizens, irrespective of one’s social or economic position in society. A good understanding of barriers to enrolment, and how they can be addressed is crucial for the design and implementation of an efficient, fair, and equitable UHC system.
A phased implementation of this approach is recommended, commencing with a pilot program in eight carefully selected counties for 7-9 months. The selection of these initial counties should be aligned with the historical administrative divisions, namely Central, Rift Valley, Nyanza, Nairobi, North Eastern, Coast, Eastern, and Western regions. Such a strategic piloting would not only mitigate potential risks of smooth implementation but should also provide an opportunity for evidence-based adjustments of the approach, ensuring a more streamlined build-up of an effective UHC system nationwide. The economic impact of this approach lies in its potential to enhance the overall cost-effectiveness of the program, minimizing unforeseen challenges and maximizing positive outcomes as it progresses through time to a fully-fledged national system. In such a scenario, regulatory measures must be implemented to mandate schools to ensure all enrolled children maintain an annual, active subscription that is convenient and affordable to parents. The principle of convenience and affordability of subscriptions should apply to all citizens and residents.
- The Mandatory Enrolment’s Two-Fold Sided Nature
The mandatory aspect of the enrolment requires that everyone must be covered by the program and that enrolment into it is not optional for adults. No one should opt out of care when it is needed, and no one will be denied such care by the health system. The alignment of care utilization and provision is ensured by mandatory enrolment. Correspondingly, enrolment into SHIF encompasses both an identity (ID) card and a SHIF registration number for all 18-year-olds. This is the dual nature of the enrolment. The user of health care must possess a unique ID and the payer/provider of that care must have a unique SHIF registration for the user. This dual identification of the user ensures that no user can claim the care for another. Additionally, the payer/provider cannot deny care to a holder of a unique SHIF registration number. The imperative of widespread identity card ownership is underscored by the fact that about 200,000 Kenyans apply for an ID card each month[6], reflecting the fact that the enrolment approach outlined above will encompass a substantial demographic group.
The economic value of an identity card becomes apparent through the myriad services it facilitates, ranging from routine access to buildings to pivotal functions, such as banking and employment verification. Therefore, it is economically prudent to ask that an ID be an enrolment requirement as there is an incentive for an individual to have an ID card and thus the majority of the population will have it. The concurrent application for the SHIF number alongside the identity card should happen smoothly. Legislative provisions of the SHIF mandate that every 18-year-old obtain a unique SHIF number, contributing a specified amount based on personal income or socio-economic status, with the government complementing individual contributions with a subsidy amount determined through a proxy means-testing procedure developed jointly by the Ministry of Health and Kenya’s Development Partners.
This approach ensures inclusivity by reaching segments potentially overlooked by other methodologies such as school enrolment or those engaged in formal employment. Given the daily instances of millions of 18-year-olds and individuals renewing lost or defaced ID cards, this strategy emerges as a robust and economically sound method for comprehensive coverage and active participation in the SHIF program.
- Conclusion
In conclusion, the implementation phase of the SHIF stands as a pivotal stage in the health policy-making process, ensuring the translation of policy goals into tangible health and related outcomes. To fully realize the benefits of SHIF, it is imperative to recognize that the old system (NHIF) has encountered various issues, including fraudulent activities, high operational costs, and inefficiencies that demand immediate attention and resolution. Even when these issues are resolved, the enrolment of households who were not part of NHIF is also quite important.
One of the primary advantages of social health insurance programs, like SHIF, is their ability to encourage risk pooling. This concept involves creating a large and diverse pool of contributors who collectively share the financial burdens associated with specific risks, such as illnesses and injuries. By distributing the impact of adverse events across a broad population, the individual hardships and financial strain resulting from unexpected health circumstances are significantly reduced.
Moreover, the benefits of SHIF extend beyond the individual level to encompass broader societal advantages. Through enhanced access to healthcare services and improved health outcomes, SHIF contributes to a healthier and more productive population. This, in turn, fosters economic development, reduces poverty, and enhances overall social well-being. By investing in SHIF, society as a whole stand to reap substantial dividends in terms of improved health, increased resilience to health risks, and enhanced socio-economic prosperity. In essence, a social health insurance program serves as a safety net, providing crucial support to everyone in times of health care needs.
[1] Kenya Demographic Health Survey, 2022
[2] A Case for Increasing Public Investments in Health Raising Public Commitments to Kenya’s Health Sector by David N. and Wanjala P. (2020)
[3] Economic Survey 2023
[4] Economic Survey, 2023
[5] Supplementary Two Budgets FY 2021/22 and 2022/23
[6] https://nation.africa/kenya/news/broken-system-inside-kenya-s-id-crisis-4515168
More Blogs
Gen Z Collective Action on Taxation and Economic Policy.
Introduction The Finance Bill 2024 in Kenya sparked a wave of collective action primarily driven by Gen Z, marking a significant moment for youth engagement in Kenyan politics. This younger generation, known for their digital fluency and facing bleak economic prospects, utilised social media platforms to voice their discontent and mobilise protests against the proposed […]
Two Immediate Monetary-Framework Imperatives for Mr. Mbadi
The credibility of Monetary Policy in Kenya is compromised at present by two factors: As we anticipated mid-year, inflation is headed below the target range for the first time; The 7-member Monetary Policy Committee (MPC) has four vacancies. In light of the former prospect, the MPC reduced the Central Bank of Kenya (CBK) Policy Rate, […]
Important dates and Citizen Concerns During Budget Planning Phase for Fiscal Year 2025/2026
The Budget formulation and preparation process in Kenya is guided by a budget calendar which indicates the timelines for key activities issued in accordance with Section 36 of the Public Finance Management Act, 2012.These provide guidelines on the procedures for preparing the subsequent financial year and the Medium-Term budget forecasts. The Launch of the budget […]
Adjusted IMF Program Demands on Kenya
In the IMF WEO published yesterday, the IMF elaborated its macroeconomic framework for the ongoing IMF program. The numbers clarify how the program, derailed by the mid-year Gen-Z protests, has been adjusted to make possible the Board meeting for the combined 7th and 8th Reviews scheduled for October 30. The adjustments, unfortunately, again raise profound […]
What does the Nobel Prize in Economics 2024 mean for Constitution Implementation in Kenya?
Daron Acemoglu, Simon Johnson, and James A. Robinson won the 2024 Nobel Prize in Economics for their research on how a country’s institutions significantly impact its long-term economic success.[1] Their work emphasizes that it’s not just about a nation’s resources or technological advancements but rather the “rules of the game” that truly matter. Countries with […]
Increasing Enrolment in Kenya’s Social Health Insurance: How Best It Can Be Done
| Post date: Tue, Mar 26, 2024 |
| Category: Social Health Insurance |
| By: Fiona Okadia, |
While Kenya has long implemented the NHIF (National Hospital Insurance Fund) whose core mandate is to provide medical insurance coverage to all its members and their declared dependants and also to make medical care affordable, enrolment rates, particularly in the voluntary and informal sectors, remain low. Yet, NHIF is the most common type of health insurance in Kenya today. In 2022, it was ascertained that one in four persons in Kenya (26% of females and 27% of males) have some health insurance[1]. Furthermore, 6.2% of Kenyans spend at least 40% of their non-food income on health care, which indicates that the incidence of catastrophic health expenditures[2] in Kenya is around 6%. This fraction of the population is at risk of being impoverished by the utilization of health care. Large out-of-pocket health care expenditures are associated with a high level of borrowing, which reduces future consumption, and with depletion of assets and savings which reduces the households’ ability to shield themselves against events that reduce current consumption. Thus, catastrophic health expenditure potentially reduces the current and future well-being of households. The link between income poverty and access to quality health services is clear; there is thus a need to assist more Kenyans to have medical insurance as opposed to having them rely on out-of-pocket payments in the event of sickness.
In this piece, I propose interventions aimed at increasing households’ enrolment in the Social Health Insurance Fund (SHIF), recently established by an Act of Parliament. The Act emphasizes the importance of implementing policies that lead to compliance with the Act while ensuring that the enrolment is convenient and affordable to citizens.
- Using Schools as a Platform for Enrolment
Utilizing schools as a strategic platform for household enrolment emerges as a compelling approach, leveraging their extensive network and societal reach. Schools can serve as a focal point to facilitate the enrolment of uninsured children and households. The inherent advantages lie in the accessibility of schools, the established trust between parents and educational institutions, and ready communication channels on health needs that can be utilized by SHIF, the parents, and the Government. This communication mechanism should facilitate reimbursement of schools by SHIF for any proactive outreach and enrolment activities the schools might incur. This bottom-up approach to enrolment and collaboration would not only benefit students and their families by ensuring access to essential healthcare but also contribute to the achievement of overarching health objectives of the Social Health Insurance Fund.
The first justification for this approach is the fact that education has the first call on the national budget, as it accounts for the largest share of the public expenditure. The Teachers Service Commission (TSC), serving as a pivotal unit within the education sector, employs a significant portion of the public service labor force, precisely 37% (348,000)[3]. Acknowledging the centrality of education in the government’s service provision, aligning health enrolment efforts with educational institutions not only capitalizes on their accessibility by the general public but the alignment also taps into a sizable demographic group through a trusted and well-established network of public and private stakeholders in what the government’s work. This collaborative, integrated strategy of enrolment into SHIF presents an economically viable and socially impactful means to extend and enhance health coverage across all population groups.
Secondly, the strategy leverages a singular public service, accessed by 14.4 million Kenyans daily, encompassing 10.364 million children in primary schools and 4.4 million in secondary schools. These figures are readily available at the Kenya National Bureau of Statistics (KNBS).
Thirdly, the educational landscape comprises 27,174 pre-primary, 23,631 primary, and 9,247 secondary public schools in Kenya, totaling 60,052, which rises to 81,454, when private sector involvement across these categories[4] is factored in. Examining the budgets allocated to the education sector for FY 2021/22 and FY 2022/23, amounting to Ksh 107 billion and Ksh 134 billion respectively, underscores the substantial scale of this proposed enrolment platform[5].
The evidence available affirms the platform’s potential as an effective vehicle for advancing various social policies, notably broad-based enrolment into SHIF to make Universal Health Coverage (UHC) in Kenya a reality. By integrating the statistics on enrolment with other relevant data points, such as the average household size, which currently stands at 3.9 according to the latest 2019 Census, it is apparent that the proposed social infrastructure provides a practical means to capture a substantial percentage of the population into social insurance.
Kenya has the opportunity to develop a workable model of universal health coverage that other countries at comparable levels of socioeconomic development can adopt. However, to ensure its success, the government needs to delve into understanding the root causes behind the low enrolment rates in different parts of the country. Implementing a compulsory enrolment system, where, for instance, parents are mandated to provide evidence of annual enrolment effort (payment of premiums, children’s school attendance, participation in school-based health activities).
In this effort, SHIF should allocate resources to educational institutions, and facilitate the enforcement of mandatory enrolment for all citizens and residents. This particular effort might involve establishing social insurance offices at the sub-county level and collaborating closely with schools to ensure compliance with the enrolment guidelines. An essential monitoring and evaluation component of this strategy entails conducting a regular comprehensive cost-benefit analysis of the administrative activities of the Social Health Insurance Fund.
Such an approach should serve as a proactive investment in the nation’s health and social well-being. The upfront costs associated with the management of the approach can be justified by the long-term economic and societal benefits associated with UHC that ensures good health for all citizens, irrespective of one’s social or economic position in society. A good understanding of barriers to enrolment, and how they can be addressed is crucial for the design and implementation of an efficient, fair, and equitable UHC system.
A phased implementation of this approach is recommended, commencing with a pilot program in eight carefully selected counties for 7-9 months. The selection of these initial counties should be aligned with the historical administrative divisions, namely Central, Rift Valley, Nyanza, Nairobi, North Eastern, Coast, Eastern, and Western regions. Such a strategic piloting would not only mitigate potential risks of smooth implementation but should also provide an opportunity for evidence-based adjustments of the approach, ensuring a more streamlined build-up of an effective UHC system nationwide. The economic impact of this approach lies in its potential to enhance the overall cost-effectiveness of the program, minimizing unforeseen challenges and maximizing positive outcomes as it progresses through time to a fully-fledged national system. In such a scenario, regulatory measures must be implemented to mandate schools to ensure all enrolled children maintain an annual, active subscription that is convenient and affordable to parents. The principle of convenience and affordability of subscriptions should apply to all citizens and residents.
- The Mandatory Enrolment’s Two-Fold Sided Nature
The mandatory aspect of the enrolment requires that everyone must be covered by the program and that enrolment into it is not optional for adults. No one should opt out of care when it is needed, and no one will be denied such care by the health system. The alignment of care utilization and provision is ensured by mandatory enrolment. Correspondingly, enrolment into SHIF encompasses both an identity (ID) card and a SHIF registration number for all 18-year-olds. This is the dual nature of the enrolment. The user of health care must possess a unique ID and the payer/provider of that care must have a unique SHIF registration for the user. This dual identification of the user ensures that no user can claim the care for another. Additionally, the payer/provider cannot deny care to a holder of a unique SHIF registration number. The imperative of widespread identity card ownership is underscored by the fact that about 200,000 Kenyans apply for an ID card each month[6], reflecting the fact that the enrolment approach outlined above will encompass a substantial demographic group.
The economic value of an identity card becomes apparent through the myriad services it facilitates, ranging from routine access to buildings to pivotal functions, such as banking and employment verification. Therefore, it is economically prudent to ask that an ID be an enrolment requirement as there is an incentive for an individual to have an ID card and thus the majority of the population will have it. The concurrent application for the SHIF number alongside the identity card should happen smoothly. Legislative provisions of the SHIF mandate that every 18-year-old obtain a unique SHIF number, contributing a specified amount based on personal income or socio-economic status, with the government complementing individual contributions with a subsidy amount determined through a proxy means-testing procedure developed jointly by the Ministry of Health and Kenya’s Development Partners.
This approach ensures inclusivity by reaching segments potentially overlooked by other methodologies such as school enrolment or those engaged in formal employment. Given the daily instances of millions of 18-year-olds and individuals renewing lost or defaced ID cards, this strategy emerges as a robust and economically sound method for comprehensive coverage and active participation in the SHIF program.
- Conclusion
In conclusion, the implementation phase of the SHIF stands as a pivotal stage in the health policy-making process, ensuring the translation of policy goals into tangible health and related outcomes. To fully realize the benefits of SHIF, it is imperative to recognize that the old system (NHIF) has encountered various issues, including fraudulent activities, high operational costs, and inefficiencies that demand immediate attention and resolution. Even when these issues are resolved, the enrolment of households who were not part of NHIF is also quite important.
One of the primary advantages of social health insurance programs, like SHIF, is their ability to encourage risk pooling. This concept involves creating a large and diverse pool of contributors who collectively share the financial burdens associated with specific risks, such as illnesses and injuries. By distributing the impact of adverse events across a broad population, the individual hardships and financial strain resulting from unexpected health circumstances are significantly reduced.
Moreover, the benefits of SHIF extend beyond the individual level to encompass broader societal advantages. Through enhanced access to healthcare services and improved health outcomes, SHIF contributes to a healthier and more productive population. This, in turn, fosters economic development, reduces poverty, and enhances overall social well-being. By investing in SHIF, society as a whole stand to reap substantial dividends in terms of improved health, increased resilience to health risks, and enhanced socio-economic prosperity. In essence, a social health insurance program serves as a safety net, providing crucial support to everyone in times of health care needs.
[1] Kenya Demographic Health Survey, 2022
[2] A Case for Increasing Public Investments in Health Raising Public Commitments to Kenya’s Health Sector by David N. and Wanjala P. (2020)
[3] Economic Survey 2023
[4] Economic Survey, 2023
[5] Supplementary Two Budgets FY 2021/22 and 2022/23
[6] https://nation.africa/kenya/news/broken-system-inside-kenya-s-id-crisis-4515168
More Blogs
Gen Z Collective Action on Taxation and Economic Policy.
Introduction The Finance Bill 2024 in Kenya sparked a wave of collective action primarily driven by Gen Z, marking a significant moment for youth engagement in Kenyan politics. This younger generation, known for their digital fluency and facing bleak economic prospects, utilised social media platforms to voice their discontent and mobilise protests against the proposed […]
Two Immediate Monetary-Framework Imperatives for Mr. Mbadi
The credibility of Monetary Policy in Kenya is compromised at present by two factors: As we anticipated mid-year, inflation is headed below the target range for the first time; The 7-member Monetary Policy Committee (MPC) has four vacancies. In light of the former prospect, the MPC reduced the Central Bank of Kenya (CBK) Policy Rate, […]
Important dates and Citizen Concerns During Budget Planning Phase for Fiscal Year 2025/2026
The Budget formulation and preparation process in Kenya is guided by a budget calendar which indicates the timelines for key activities issued in accordance with Section 36 of the Public Finance Management Act, 2012.These provide guidelines on the procedures for preparing the subsequent financial year and the Medium-Term budget forecasts. The Launch of the budget […]
Adjusted IMF Program Demands on Kenya
In the IMF WEO published yesterday, the IMF elaborated its macroeconomic framework for the ongoing IMF program. The numbers clarify how the program, derailed by the mid-year Gen-Z protests, has been adjusted to make possible the Board meeting for the combined 7th and 8th Reviews scheduled for October 30. The adjustments, unfortunately, again raise profound […]
What does the Nobel Prize in Economics 2024 mean for Constitution Implementation in Kenya?
Daron Acemoglu, Simon Johnson, and James A. Robinson won the 2024 Nobel Prize in Economics for their research on how a country’s institutions significantly impact its long-term economic success.[1] Their work emphasizes that it’s not just about a nation’s resources or technological advancements but rather the “rules of the game” that truly matter. Countries with […]