Union disowns fresh NHIF bid to raise rates

The workers’ umbrella body has for the second time in four months disowned plans by the statutory National Hospital Insurance Fund (NHIF) to increase premiums.

The Central Organisation of Trade Unions (Cotu), which sits on the NHIF board, has threatened mass and legal actions if the Fund does not drop the plans by the end of this week.

“We will take any necessary steps to ensure that the new rates are not gazetted because the issues we had raised earlier about NHIF are still outstanding,” said Cotu deputy secretary-general George Muchai.

Medical Services minister Anyang’ Nyong’o last week on Friday announced that the new premiums, to be graduated according to a worker’s salary, would take effect next month. Prof Nyong’o was inaugurating a new NHIF board despite differences with the Office of the President on who should govern the insurer.

The controversial rates would see all workers in the formal sector deducted between Sh150 and Sh2,000 per month towards the public health insurance provider from October 1.

Formal sector employees contribute a monthly flat rate of Sh320 but can only use the cover when ‘admitted’ at accredited NHIF hospitals. With the new rates, workers earning a monthly income of more than Sh100,000 are expected to contribute a standard fee of Sh2,000, while those earning less than Sh6,000 would pay Sh150.

Monthly contributions for employees whose income falls between Sh6,000 and Sh100,000 would vary on a graduated scale.

Civil servants and members of the disciplined services will not be affected as they have a separate enhanced medical scheme that offers unlimited inpatient and outpatient cover.

Mr Muchai gave Prof Nyong’o seven days to withdraw the directive, saying concerns that led to the suspension of the higher contributions in May had not been resolved. Among them was NHIF’s capacity to deliver the promised universal healthcare services.

“There are still no structures to ensure that members’ contributions would only be used to provide their health insurance,” Mr Muchai said.

When the concerns emerged in May, a caretaker committee was formed to investigate claims of payments to ghost service providers under the controversial NHIF outpatient scheme.

The caretaker committee represented by Cotu, the employers’ lobby FKE and the different government ministries was also mandated with identifying weaknesses that dogged NHIF bid to provide enhanced medical insurance to workers in the formal sector.

The committee’s findings and recommendations have neither been handed to the President nor made public yet. Mr Muchai, however, said the caretaker committee in which Cotu secretary-general Francis Atwoli was a member unearthed outright plunder of workers’ contributions.

The rates had been suspended on May Day following a public outcry and a strike notice issued by Cotu to allow further consultations with stakeholders in the labour market. Cotu had earlier lost a suit that sought to bar the new deductions.

Kenya Private Sector Alliance (Kepsa) chairman Patrick Obath said workers and employers were still wary of corruption at NHIF. “Concerns about wastage of public funds at NHIF are still very valid and we are very much against the introduction of the higher rates for now,” said Mr Obath.

Too high

He said Kepsa supported the enhanced public health insurance package, but wished that public confidence in the insurer could be restored before the rates are reintroduced.

Mr Obath, who is a management consultant and director in two listed companies, said that employers were likely to cut back on their expenditure on private sector insurance premiums, meaning workers were unlikely to pay more overall.

Opponents of the envisaged cover have said the deductions were too high given that many employers had private health schemes for their workers.

NHIF projects that the higher member contributions would enable it to provide comprehensive health services, including covers for outpatient and chronic illnesses such as diabetes, kidney problems and HIV/Aids that are mostly not covered by private health insurers. Paid-up members would also have their medication, consultation fees, family planning services, X-Ray and ultra-sound diagnosis paid for by the fund.