'We did benchmarking': NHIF CEO on how gov't arrived at 2.75% deduction rate

National Health Insurance Fund (NHIF) Acting CEO Dr. Samson Kuhora now says that the state conducted external benchmarking before proposing to increase monthly contributions to 2.75 percent.

Speaking on Citizen TV's The Explainer Show on Tuesday, Kuhora noted that the State compared NHIF's data with that of other health agencies in Tanzania, Ghana and Nigeria before settling on the 2.75 percent recommended deductions.

"We did an actuarial analysis of how much it would cost to offer the essential benefit package and compared it to the current contributions which range from between five percent, for the lowest income earners, to 1.2 percent for the population earning more than Ksh.100,000," he said.

"From a weighted matrix, the suggestion was that the equalizing effect was to offer a rate of 2.75 percent. This figure will generate revenues that will finance social health insurance to offer the social benefit package suggested by the government."

On his part, Seme MP Dr. James Nyikal noted that the justification for the proposed deductions is acceptable as long as Kenyans get their money's worth.

"They have done actuarial study which has indicated what they need to offer the essential package. To that extent it is okay. As to whether people can afford it, what is really important is how it is used."

"People pay so much in health so if they are paying that much and getting full cover then that is acceptable," said Nyikal who sits on the National Assembly's Health Committee.

Dr. Dennis Miskellah, KMPDU Deputy Secretary General, however, questioned how the recently proposed NHIF tax deductions came to be since the Union's members were allegedly not consulted during the process.

He added that increased deductions do not automatically translate to better healthcare services further stating that inefficiencies at NHIF need to be addressed first before assenting to the proposed deductions.

"From the worker's perspective we are not happy with how the whole idea came about because I don't remember any time that the workers, whose money is deducted, were involved in coming up with this decision," he said.

"More importantly it is about inefficiencies in the organization. As workers, we believe that deducting more will not solve problem of inefficiencies at NHIF."

Miskellah's sentiments were echoed by Kenya Medical Association President Dr. Simon Kigondu who chimed in that the proposed NHIF rate is too costly for salaried workers.

"There is a way of equalizing funds. So our proposal would be that a part of the VAT should be a tax component to fund NHIF so that this 2.75 per cent which is quite high, is supplemented," he said.

The proposals contained in the NHIF regulations 2023 state that where a contributor in self-employment declares less than Ksh.300 of their monthly income, then they shall pay a sum of Ksh.300 to the fund.

A section of Kenyans have endorsed the proposal which they say will enhance health services.