Curtains fall on defunct, scandalous NHIF; how it dimmed the UHC dream

Its burial was held without any ceremony. NHIF’s death was triggered by its parent, the National Government when it legally triggered its cessation to existence in the National Assembly and in its place, bore a new entity, called the Social Health Insurance Fund (SHIF).

The defunct NHIF was a State Parastatal established in 1966 as a department under the Ministry of Health.

The original Act of Parliament that set up this Fund in 1966 has over the years reviewed and mangled in equal measure to accommodate the competing parochial interests in the dynamic healthcare needs of Kenyans, unravelling digital developments, labour policies and restructuring in the health sector.

The NHIF Act No 9 of 1998 governed the Fund until its demise. The alteration of NHIF from a department of the Ministry of Health to a State of Corporation was aimed at transforming it, to make it autonomous and hence improve its effectiveness and efficiency.

The Fund’s core mandate was to provide medical insurance cover to all its members and their declared charges (spouse and children). Its membership was open to all Kenyans of the age of maturity in Kenya.

NHIF coverage reached all 47 counties in Kenya.

Mission, Vision, and Objective of Defunct Fund

The defunct NHIF set out to enhance our community's equitable and sustainable health and well-being, cushioning them from financial hardship.

However, what soon unravelled was the exact opposite as many contributors would only access basic cover from their contributions.

If admitted to the hospital, the pitiable cover would only pay for the bed costs of the patient under its cover, unless covered under the products of enhanced cover.

NHIF had a vision nonetheless, it sought to be the most trusted and valued partner in securing the health of our community.

But his was to no avail, with every step they took forward, some forces within the country were plotting for them to fall back two steps backwards.

The Fund had an objective to increase revenue collection, engage & educate customers: enhance operational excellence; manage risk; and build a high-performance culture.

All these ended up as nice words on paper as none of these goals were even nearly attained.

The Fund sought to be given more funds to manage from statutory deductions without a clear plan on how the increased revenue figures would correlate to better and deeper coverage of its members.

In any case, the funds the NHIF were given to manage became fodder for corruption cartels within and without its walls, apart from the notorious Kenya Police, it became the alternate poster boy for corruption in government.

The NHIF Offer

The basic or minimal cover amount at the Fund was set at Ksh.500 or Ksh.6,000 if you wish to pay for the whole year.

This coverage would ensure one is given very basic coverage such as outpatient services at a prescribed clinic and in the case of inpatient services, the cover would notoriously only pay for the bed charges of the patient.

Under its enhanced products it went to to give cover for civil servants and the disciplined forces with more benefits but as would be expected there were always arguments on the level and amounts of benefits accruing from this coverage.

The National Health Scheme (NHS) dubbed “UHC Supacover” was the primary health insurance cover for all members and their declared dependents as provided in the Amended NHIF Act of 2022.

The membership was both statutory (employed) and voluntary (self-employed) to all Kenyans who are ordinarily residents of Kenya and who have attained the age of 18 years.

Members enjoyed inpatient, and outpatient services and special benefits packages. Voluntary contributors would pay Ksh.500 every month for the principal members and their declared dependents.

The best cover the NHIF gave was the Enhanced Scheme (ES); a negotiated comprehensive cover between a procuring entity and NHIF. It was an enhancement of the National Health Scheme (NHS).

It covered Civil Servants, the National Police and Prison Service (NPS/KPS), County Governments, Parastatals, Pension Schemes for Retired Public officers e.g. The Kenya Association of Retired Officers (KARO), Water & Sewerage Companies, Public Universities among others.

Linda Mama Initiative

The Linda Mama program began as Free Maternity Services introduced by the Jubilee Administration in June 2013 administered by the Ministry of Health (MoH).

In July 2016, the Free Maternity Services Program transitioned to NHIF, where it was rebranded to “Linda Mama” which was subsequently launched in October 2016 in Nairobi.

Linda Mama became a Government Flagship program that was subsequently rolled out on April 1, 2017. It became a nationwide program funded by the government, the World Bank and the Japan International Cooperation Agency (JICA) as it set out to cater for all pregnant Kenyan women.

Reports would later emerge in 2023, that the government had stopped providing free maternal services.

“NHIF wishes to assure the public that the cover is still active as mothers continue to benefit massively. The Fund therefore urges the public to ignore the false message shared online,” NHIF disputed the reports.

Attempts in Universal Health Coverage

Kenya, since the advent of devolution, has had the health service delivery function domiciled in county governments while the national government retained only the policy and regulatory functions.

County governments have the responsibility of planning, management and budgeting of health matters in the country.

Therefore, when the Universal Health Coverage (UHC) pilot project was rolled out by the Ministry of Health and National Hospital Insurance Fund (NHIF), the counties were to be at the fore to present a realistic opportunity to ensure Kenyans have access to the health services they need without suffering financial hardship.

However, after having rolled out the pilot stage within four counties, the rollover towards UHC was abandoned with the change of Administration in the year 2022.

The benefits Kenyans could access under UHC were dubbed the “UHC Supacover” package. The principle of UHC was that those who could pay would pay and those who did not could be identified and supported.

The Government of Kenya together with the sponsors of the program supported the initial 1 million vulnerable families identified within the pilot phase.

It was a comprehensive package that covered all diseases, conditions, medication, therapy, medical procedures, emergency treatment anywhere and even treatment out of the country.

Mind-boggling NHIF scandals

NHIF was bedevilled by wanton waste, mismanagement, cronyism and corruption for the longest time.

It is not a stranger to corruption scandals yet the peak of ignominy that it hit within the last few years was just mind-boggling.

As if it had thrown caution to the air, internal controls were simply ignored in a series of rip-offs that were appalling.

In September 2024, according to a petition tabled by one Bernard Muchere, the National Health Insurance Fund (NHIF) was defrauded Ksh.21 billion through fictitious claims for the financial year that ended June 2022.

A petition tabled by Bernard Muchere, a former fraud risk management consultant, indicated that NHIF coffers lost billions through made-up incurred but not reported (IBNR) claims by unscrupulous individuals.

Before this in July 2024, NHIF claimed it had paid out Ksh.368 million in excess claims due to "typing errors" and had no proof of where the money went.

Auditor-General, Nancy Gathungu, laid bare the scandal exposing leakages within the fund managing billions of shillings belonging to Kenyans.

She revealed that in the financial year ending in June 2023, they paid out Ksh.814.9 million claims yet hospitals only billed Ksh.447.12 million using 10 schemes.

The NHIF blamed the excess payment as a result of “typing errors” by hospital clerks.

The strange thing is, that they could not provide proof of recovery of the excess payments or seek documentary evidence from the affected hospitals to check their data for veracity.

As if this was not enough, in June 2023, an expose aired by NTV on June 18, 2023, revealed that some private hospitals in Nairobi and Meru Counties were involved in a complex syndicate in collaboration with the NHIF staff to steal public healthcare funds.

The expose said there was rampant inflation of medical care bills, poor administration of medical care and unqualified administration of medicine to patients.

Many patients were deceived into accepting healthcare services from colluding corrupt medical centres in Nairobi and Meru Counties.

The exposé was a call to urgent action, as well as holding to account those involved and reforming the operations and governance of the Fund.

Corruption crippling UHC

Corruption in the health sector diverts resources, causes inequitable access, compromises healthcare quality, and weakens health systems.

It creates disparities that make healthcare unaffordable.

To protect the right to health, it is vital to address corruption through transparency, accountability, and anti-corruption measures that ensure equal access to quality healthcare services.

As a public institution, NHIF was set up to play a critical role in facilitating access to quality healthcare services for Kenyans, however, it got compromised and suffered an ignominious exit.

Corruption undermines the trust of citizens in government and is especially now evident as various sectors of the government are struggling as a result of a lack of trust.

At its peak, the NHIF only managed to enrol 20% of Kenyans, the majority, 80% were left exposed to appalling out-of-pocket expenditures to access health services.

Corruption within NHIF impacted negatively on the enjoyment of the right to health for Kenyans as enshrined in the Constitution of Kenya and to the achievement of Universal Health Coverage (UHC) in Kenya.

Even with the new entity Social Health Insurance Fund already in place to pick the pieces and begin the journey afresh, efforts must be made to stop corruption by implementing strong systems of transparency and oversight.

A bumpy road to UHC as the 2030 clock ticks

For Kenya to achieve the set goal of Universal Health Care for all Kenyans by 2030, emphasis will need to be placed on some key areas such as scaling up maternal and child health, immunization coverage, prevention of non-communicable diseases, and prevention of waterborne diseases among others.

To begin with, focus has to be given to preventable and primary health care.

Kenya’s over-reliance on health sector donor funding and inadequate health financing could see the country fail to actualize the UHC dream by 2030.

The government should view UHC not as a destination but as a continuous process which will involve constant widening of the social safety nets to ensure that no one is left behind.

While our ability as a country to address health equity challenges is improving gradually, improved health budgeting is critical if Kenya were to achieve the desired UHC outcomes.

As SHIF comes on board to succeed the NHIF, it is important to understand that to reform the health care system to be fit for Kenya, there must be a deliberate move to provide sizeable health budgets at the county level, to be purposeful in consolidating donor funding, improve the national and county level budget absorption, achieve good internal controls and create effective organizational oversight.