NHIF chief executive officer Simon ole Kirgotty. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
Salaried workers’ contributions to the NHIF currently ranges between Sh30 to Sh320 based on the gross monthly salary.
Self-employed workers have been spared the hefty increase in the monthly contributions to the National Hospital Insurance Fund (NHIF) after Cotu agreed with the State-backed insurer to keep rates for this segment unchanged.
Members of the fund who are not in formal employment will continue paying Sh160 per month as NHIF and the workers representative agreed to increase contributions for salaried workers by more than four-fold.
The proposed contributions for those in formal employment will range between Sh150 and Sh1,700 per month depending on their income. Salaried workers’ contributions to the NHIF currently ranges between Sh30 to Sh320 based on the gross monthly salary.
The increase is expected to be particularly painful to a huge fraction of the working class, 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 contributions from Sh200 to Sh1,080.
The higher contributions will help the fund expand its offerings to include both inpatient and outpatient covers and treatment for chronic illnesses such as diabetes, high blood pressure and HIV/Aids that some private health insurers hesitate to cover. The outpatient cover will be a first for NHIF.
“The idea is for top earners to bear part of the burden for those at the bottom end. But the upper income people will benefit from a large cover,” NHIF Chief Executive Officer Simon ole Kirgotty told the Business Daily on Friday.
The fund had 2.7 million members from the formal sector, who are required by law to make NHIF contributions, in June last year and 1.12 million who regarded voluntary members including pensioners, the self-employed and those out of work. They contributed Sh12 billon in the year to June 2013. The fresh contribution plan is the latest push by NHIF to increase its revenue base that has remained unchanged since 1988.
The fund in 2011 sought to increase the premiums to between Sh150 and Sh2,000, but Cotu blocked the rise in court on the grounds that the fund should be reformed before any new charges could be done.
Major scandals have eroded public confidence in NHIF, but the fund is reforming itself in changes that have seen its former CEO Richard Kerich and four other executives charged in court with fraud.
The fund earlier sought to increase the monthly rare to Sh500 for the self-employed.
On Thursday, the fund reached a deal with Cotu on the new rates, setting the stage for withdrawal of a court suit and introduction of the new charges. Those earning a gross monthly salary of Sh15, 000 will pay in Sh600 up from the current maximum of Sh320
For those earning between Sh30, 000 and Sh50, 000 contributions will range between Sh900 and Sh1, 200. Those on a salary of between Sh60,000 and Sh90,000 will pay betweenSh1, 300 and Sh1, 600. Workers earning Sh100,000 and above will pay a flat fee of Sh1, 700 per month.
