Economy

State to eject teachers, church from NHIF board

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NHIF Building in Upperhill, Nairobi. FILE PHOTO | NMG

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Summary

  • A review of the NHIF Act through a government-backed Bill will see the removal of three directors that represent teachers union, Kenya Medical Association (KMA) and faith-based organisations.
  • The Attorney-General will join the NHIF in the board shake-up, giving the government a firm grip on the cash-rich fund that collects more than Sh58 billion from workers annually.
  • Employers and the unions reckon that the NHIF belongs to workers who fully fund its operations and not the government.

The State is set to oust representatives of teachers, doctors and churches from the board of National Hospital Insurance Fund (NHIF), opening a fresh battle front with the workers and employers.

A review of the NHIF Act through a government-backed Bill will see the removal of three directors that represent teachers union, Kenya Medical Association (KMA) and faith-based organisations.

The Attorney-General will join the NHIF in the board shake-up, giving the government a firm grip on the cash-rich fund that collects more than Sh58 billion from workers annually.

Employers and the unions reckon that the NHIF belongs to workers who fully fund its operations and not the government, arguing the position gives them the right to influence the strategic direction of the fund through board seats.

The government-backed Bill will retain the six pro-government directors but cut those from the lobbies to two from the current five.

“To remove conditional appointments in the appointment of board members in order to eliminate direct and indirect interests that have beset the nomination processes that have ended in the courts to save the taxpayers the hugely expensive and litigious processes witnessed in the past,” says the Bill.

The proposal is contained in the Statute Law (Miscellaneous) Amendment Bill 2021 sponsored by National Assembly Majority Leader Amos Kimunya. It was tabled Thursday evening in Parliament.

It also gives the Council of Governors a seat on the NHIF board in recognition that health is a devolved function.

The review cut the NHIF board to nine seats, including the chair appointed by the President, leaving the private sector with two positions held by Central Organisation of Trade Unions (Cotu) and the Federation of Kenya Employees (FKE).

Voting power in the NHIF board is shared equally between the government and the private sector, but this will shift to the State if Parliament approves the amendments.

The proposed law, if adopted by lawmakers, will lead to the ouster of Jacquleine Kitulu (KMA), Latiff Shaban (faith-based representative) and Wycliffe Omucheyi (Knut).

The reduction of private sector representatives on the NHIF board has triggered criticism from FKE, who have questioned the decision to include the Attorney-General in the fund’s board.

“I am aware of the proposed changes but the rationale has not been explained. Having the Attorney-General as part of the board is anomalous, he is already an adviser to the government and so he should be removed from the board so as to continue playing the advisory role,” FKE executive director Jacqueline Mugo told the Business Daily yesterday.

FKE reckons that the government — though itself the single-largest employer — mainly finds itself on the NHIF board as a trustee.

The employers who channel more than half of the NHIF contributions have traditionally been represented by FKE.

Similarly, the workers’ interests are currently handled by Cotu and the Kenya National Union of Teachers.

This is the second time in three years that the State is seeking to oust NHIF directors drawn from the teachers’ union, the doctors association and faith-based organisations.

A similar push to kick out the representatives through a review of the NHIF Act failed in 2018.

The NHIF had 8.466 million members at end of June 2019, with 4.299 million drawn from the formal sector and 4.167 million from the informal segment.

The review of the NHIF board comes as the State mulls over a universal health coverage (UHC) scheme for outpatient and inpatient services, including maternity, dialysis, cancer treatment and surgery.

Each household will be required to make a compulsory monthly contribution of Sh500 or Sh6,000 annually to the NHIF in the quest to offer health cover for all Kenyans.

The planned mandatory NHIF membership will be an upgrade of the current scheme where only workers in the formal sector are compelled to join.

The State has offered to sponsor one million poor households at the onset of the UHC scheme, which is modelled on the US’s Obamacare that requires all Americans to buy insurance cover.

Due to low insurance penetration, a quarter of all Kenyans’ healthcare bills are paid out of pocket, according to the World Bank.

This leaves many families vulnerable and reliant on debt and donations or disposal of assets such as livestock.

Kenya has prioritised the attainment of UHC by 2022 by expanding the NHIF after years of false starts.