By Uri Ludger

President Uhuru Kenyatta recently launched a countrywide expansion of a Universal Health Coverage (UHC) programme at an event in Mombasa in February 2022. Affordable healthcare for all, alongside affordable housing, food security, and manufacturing, made up the illustrious Big 4 Agenda that was the flagship strategy of Kenyatta’s second term, with a bid to ensure that all Kenyans have feasible access to affordable and quality healthcare by 2022.

In the grand scheme of things, the jubilee government has fallen short of its promise as true coverage for all Kenyans is yet to be realised. 

As we approach this year’s elections in August, Both front runners for the presidency, Deputy President Dr William Ruto, and former Prime Minister Raila Odinga, both list an effort towards affordable healthcare as part of their leadership priorities. The former has previously lauded the programme’s importance, while the latter has proposed “Baba care” as a healthcare programme for his presidency. 

However, for the most part, what a UHC programme looks like for Kenya and how it is implemented remains an enigma. And most importantly, who is paying for it, and how?

What is UHC anyway?

Article 43 of the Kenyan constitution provides that every person has a right to the highest attainable standard of health, which includes reproductive health rights. It further states that a person shall not be denied emergency medical treatment and that the State shall provide appropriate social security to persons who are unable to support themselves and their dependents.

In reality, however, according to the 2018 Ministry of Health Kenya Household Expenditure and Utilization Survey,  between 1 and 1.1 million Kenyans were pushed into poverty due to out-of-pocket payments. UHC, therefore, exists to plug this cost gap. Put simply, Universal Health Coverage means that all Kenyans are guaranteed access to quality health services when they need them and without having to incur burdensome financial hardship to pay for these services.

Health care cannot be free, however, but instead exactly who pays for it is what is up for debate. To pay for UHC, a country can either take a a) contributory approach, in which a majority of funding has accumulated through mandatory prepayments, or a b) non-contributory approach in which tax funds and subsidies mechanisms by the government are the driving force to pay for health care.

Universal health coverage (UHC) is a priority policy agenda worldwide and is one of the Sustainable Development Goals (SDGs). According to The World Health Organization, mandatory prepayment emerges as the most efficient and equitable financing system for UHC because it has the potential to generate high revenue, and promote risk and income cross-subsidization while minimizing financial barriers to access. And indeed, the political will in Kenya on how to fund UHC is in line with this recommendation. However, as explored further below, a contributory approach might not be the best bet for Kenya to achieve affordable healthcare for all by 2030, as it has planned. 

Contributory Approach Vs. Non Contributory approach

Paying out of pocket is simply impossible for many Kenyans. Therefore, a means by which to shift the cost burden away from patients and towards the government by means of subsidy mechanisms and tax money allocation, or social health insurance through mandatory prepayments by patients, is the way to go towards achieving affordable healthcare for all Kenyans.

Ongoing policy discussions indicate that mandatory health insurance, where both formal and informal sector workers pay a premium into a national pool, will be the predominant health financing mechanism for Kenya. Recently, the National Health Insurance Fund (NHIF) Act was amended to increase the funding of the NHIF by making all persons over 18 years mandatory subscribers, as well as requiring employers to match the contributions of their employees. The NHIF has positioned itself to be the primary insurer in the country and is currently targeting 12 million new contributors.

The NHIF was established in 1966 as a department in the Ministry of Health to provide health insurance exclusively for those in formal employment. In 1972 an amendment to the Constitution was made to allow for membership for those in informal employment.

The Fund was then transformed into a state corporation through an Act of parliament, NHIF Act No. 9 of 1998. The Fund’s core mandate is to provide social medical insurance coverage to all its members and their declared dependents.

By means of the NHIF, all Kenyans are guaranteed a substantial care package that covers community health services, preventive care, primary consultation, diagnostic investigations, and inpatient admissions.

The different health care facilities in the country, broken down into faith-based, public and private, submit claims to NHIF that subsequently assesses and pays them out, effectively shifting the cost away from the patients.

As of March 2021, NHIF covers a population of about 23 million beneficiaries, 9.96 million of whom are principal members. Out of the 7,666 facilities in contract with NHIF, 5831 (75%) are government hospitals, 1524 (21%) are private and the other 4% are faith-based facilities. 

However, questions have recently been raised regarding the feasibility of a contributory approach in a  Kenyan setting. The country has a large informal sector that poses difficulties with determining the incomes of workers, appropriate premium rates, plus enforcing contributions, and ensuring that revenue collection mechanisms are administratively efficient.  Furthermore, with current premium rates under the NHIF averaging just 2.4% of gross pay for formal sector workers yet the revised benefits package is very generous, concerns about the sustainability of the NHIF are warranted.

A study carried out in 2017 published in the International Journal for Equity in Health assessed the sustainability of contributory and non-contributory financing mechanisms to achieve affordable health care in Kenya. In this context, sustainability would mean revenue outstripping expenditure in an ideal situation, or, more realistically, the scenario that breaks even at the lowest cost.

The study modelled data over a 17-year period(2013 – 2030) to find what scenario would be more sustainable in the long run. 

Insurance Data from 2013 – Africa Data Hub


The results showed that the contributory approach was sustainable for the first five years but became less so over time. On the other hand, throughout the simulation, the non-contributory scenario generates higher total revenues, because contributions from the informal sector under the contributory scenario are very limited compared to what the government pays in subsidies on behalf of this population under the non-contributory scenario. 

The contributory scenario poses a number of challenges such as being more costly than the non-contributory scenario for the same level of utilisation among the insured, much slower than the non-contributory scenario in advancing population coverage and contributing to inequities in financing and utilization.

“Even if the informal sector were organized to make revenue collection possible under a contributory mechanism, the results indicate that for revenues and expenditure to break even, the premium contribution rates for both formal and informal sector populations would have to drastically increase. Increases in contribution rates are likely to further complicate efforts to implement a contributory financing mechanism, and may exclude the poor, in a context where mechanisms to target the poor are not well developed.”(Okungu 2017)

It should be said, however, that both approaches to financing health require a substantial monetary commitment in order to be feasible, and neither is a golden bullet; from the modeling data above, if not for adjustment of several other factors, both approaches have expenditure outstrip revenue.

In 2018, the government doubled down in its commitment to UHC by launching a pilot programme in four counties namely Machakos, Kisumu, Isiolo, and Nyeri. These counties were each selected because of their individual characteristics in regards to disease burden, in order to be as representative as possible of the entire Kenyan population.

The pilot lasted 12 months but was eventually halted as a result of various factors, led by delays in funding to the county governments by the national government, exposing current gaps in the non-contributory approach.

In the midst of the COVID-19 pandemic that gripped the world from 2020, it became increasingly apparent that the NHIF would be unable to realistically cover the treatment of COVID-19 patients, leaving low-income groups especially vulnerable. This further exposes the current gaps in the contributory approach.

It is crucial that there is political will within Kenya to explore a non-contributory approach because successful implementation will be dictated by the political context and the funding priority given to the health sector. Already, current trends indicate that the health sector receives less priority in budget allocation compared to other social sectors. Unless there is a government commitment to UHC through the non-contributory approach it is unlikely that Kenya will achieve UHC by 2030 as projected by the government.

Riddled with corruption and fraud

According to the current NHIF CEO Peter Kamunyo, the Fund loses 10 Billion Kenya Shillings every year as a result of fraudulent claims, as health workers collude with NHIF officers to file false claims or to double charge/ increase the actual price to be paid.

“The sad bit is that we lose 20 percent of our collections from our members to fraudulent and fictitious claims. We already have 19 active cases in court for the hospital owners and some of the people who were raising the fake claims,” Mr Kamunyo told The Standard.

Through biometric registration and identification, adoption of electronic claims management systems, and the implementation of member and employer self-care platforms, Kamunyo said the fraudulent claims will be a thing of the past. 

“In the near future, the fraudulent claims will no longer be there, we have rolled out a massive biometric registration of our members, this means that one will be identified biometrically and use make claims which will automatically be captured out of our systems immediately,” he added.

Corruption within the Fund goes all the way to the very top, evidenced by the massive scandal from 2018 in which 1 Billion Kenya shillings went missing from the Fund’s coffers. The then CEO Godfrey Mwangi, alongside other members of top management, was arrested and charged with theft and attempting to obstruct justice by refusing to hand over documents crucial to the Directorate of Criminal Investigations’ (DCI) investigation into the fraud.

Mwangi was forced to take an immediate leave from his job and was eventually replaced, but never convicted. The case is still dragging on in court. This slap-on-the-wrist treatment for fund leadership calls into question whether the fund can truly be held accountable, especially now in the run-up to elections and it is poised as the most highly funded government parastatal.


This article was supported by Africa Data Hub.

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