Employers query Cotu deal on higher NHIF rates

Employers have questioned the deal between the National Hospital Insurance Fund (NHIF) and the Central Organisation of Trade Unions (Cotu) that will see the State-backed health insurer increase workers’ monthly contribution to Sh1,700.

The Federation of Kenya Employers (FKE) says the new rates are high and that its members have not received assurances that NHIF has the capacity to offer the promised inpatient and outpatient cover on the back of higher contributions. FKE also wants guarantee that the fund has broken corrupt networks following major scandals that previously hit the insurer, as well as the hospitals that contributors will access.

The proposed contribution will range between Sh150 and Sh1,700 per month depending on a worker’s income. Salaried workers’ contributions to the NHIF currently range from Sh30 to Sh320 based on the gross monthly salary, and Sh160 for pensioners and the self-employed.

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“As stakeholders we are yet to be consulted on the agreement, but FKE is not satisfied with proposed rates. We find them to be very high,” said Jacqueline Mugo, FKE executive director (right). “We need to know the hospitals that will be available to the contributors. Civils servants on a similar scheme are not happy and we have reasons to be concerned.”

Enjoined in suit

FKE’s support is critical given employers are enjoined in a suit where Cotu moved to court to block plans by NHIF to increase the monthly premiums three years ago.

The fund in 2011 sought to increase the premiums to between Sh150 and Sh2,000, meaning that Cotu has managed to squeeze a small concession. “We asked Cotu whether a drop of Sh300 from the previous Sh2,000 was enough to reach a deal,” said Ms Mugo.

The increase is expected to be particularly painful for many workers who will take home less pay at the end of the month at a time when the National Social Security Fund (NSSF) is seeking to raise monthly contribution from Sh200 to Sh1,080. Employers also fear that the cut could prompt workers to push for higher wages in a business environment where companies are racing to put a lid on costs.

NHIF says the higher contributions will help it expand access to quality and comprehensive healthcare that has been the preserve of rich and middle-class households. Services will include both inpatient and outpatient cover and treatment for chronic illnesses such as diabetes, high blood pressure and HIV/Aids, which some private health insurers hesitate to cover.

The outpatient cover will be a first for NHIF, placing it at par with company-sponsored health insurance schemes. Only a quarter of Kenya’s population has medical insurance, mostly provided by employers.