President William Ruto has backed the push to have the rich pay higher monthly contributions to the National Hospital Insurance Fund (NHIF), months after a similar proposal was shot down by Parliament.
Mr Ruto said that NHIF contributions will be pegged on the monthly pay of workers, in a bid to increase the funding pool of the scheme.
NHIF early this year proposed that contributions of workers earning more than Sh100,000 should be calculated as 1.7 percent of their pay. But this was rejected by the outgoing Parliament, forcing the insurer to go back on the drawing board.
The move by Dr. Ruto, who now has the backing of most members of parliament to support the NHIF proposal, comes as a major relief to the national insurer which has been looking for ways to increase its funding to implement the universal health plan.
Currently, workers earning over Sh100,000 pay a fixed monthly contribution of Sh1,700 to NHIF.
“Our health agenda is premised on fundamental reforms in the way healthcare is financed and provided. Contributions to the National Health Insurance Fund will now be graduated and will depend on people’s income,” Mr Ruto said at his swearing-in ceremony Tuesday.
Revival of the graduated scale for employees earning more than Sh100,000 will see contributions of workers paid Sh200,000 rise to Sh3,400 while those earning Sh500,000 will increase five times to Sh8,500 per month.
NHIF Chief Executive Officer Peter Kamunyo said last month that he will revive the proposal.
Mr Ruto’s move looks set to trigger unrest from employers who have previously opposed the increase in the premiums.
The Federation of Kenyan Employers in February said that the changes will affect the wage bill and sustainability of businesses to create new jobs and maintain the existing ones.
Dr. Ruto’s decision comes months before the NHIF gazetted proposed regulations including those that will guide how contributions are calculated as the country moves to roll out affordable and quality healthcare for all.
NHIF projects that by having top earners pay more in monthly contributions and compulsory membership for all Kenyans aged above 18, the scheme will raise an additional Sh20 billion a year.
The mandatory NHIF membership is an upgrade of the previous scheme where only workers in the formal sector are compelled to join. Informal workers had a choice to join or drop NHIF membership, with their monthly contributions set at Sh500.
Increased funding is critical to the NHIF given that claims are expected to increase significantly under the UHC.
