Board chair National Hospital Insurance Fund, Michael Kamau, has come out to clarify the government’s proposed new rates.
While supporting the decision to increase NHIF contributions, Kamau said that the proposal to increase contributions to 2.7% are meant to establish equity among contributors.
He further added that there has never been equality in how people pay the insurance fund irrespective of the difference in the amount of salaries they earn.
The only way to create equity is to by using percentage. There was no equity, anybody earning 100K and above was paying 1,700 shillings
So when we worked all the averages, we averaged it to 2.5 percent of all the total receipts,” Kamau said in an interview with Citizen TV.
“The young pay for the old. Those who can pay more, pay more to support those who can pay less. It won’t matter if we only have the rich people being able to pay private insurance and their health is taken care of and then the rest of us are sick. We are all going to die.”
The new NHIF board chairperson added that according to the NHIF database, a number of contributors are paying Sh1,700 which works out to a 1.12 percent average of their salariesKamau’s remarks reiterate President William Ruto’s proposed amendments to the insurance contribution formula which suggested an increase to 2.7 percent.
In the proposed reforms, self-employed persons and those in the informal sector are to pay Sh300 as opposed to the previous Sh500.Additionally, those earning a gross salary of between Sh50,00 and Sh100,000 will contribute Sh1,350, while employed persons earning Sh100,000 and above will contribute Sh2,700 towards the fund, compared to the previous flat rate of Sh1,700.
“A contributor in salaried employment shall pay a standard contribution at a rate of 2.75 percent of the gross monthly income derived from employment in the preceding month, while a contributor in self-employment shall pay a special contribution to the fund at a rate of 2.75 percent of the declared or assessed gross monthly income,” the proposal reads in part.
Kamau also said that the government shall pay for unemployed citizens who are considered vulnerable.
NHIF has recently come to the limelight over fraud and corruption allegations where some hospitals in Nairobi and Meru counties were closed for defrauding the health fund.
The NHIF chair said that the insurance body is in the process of an overhaul, and promised to do away with corruption by improving the technology system that is easily manipulated and bringing in new management.
