How We Arrived At A 2.75 Per Cent Deduction For Social Health Insurance Fund – Nakhumicha
On Wednesday, January 24, Health Cabinet Secretary Susan Nakhumicha explained the reason for subtracting 2.75% from the gross income of every Kenyan to support the Social Health Insurance Fund (SHIF).
In an interview with Citizen TV, Nakhumicha clarified that the percentage had been suggested by actuarial scientists based at the Ministry of Health.
She clarified that the percentage was determined by the scientists through the calculation of the funding required for all public health facilities in Kenya.
“First we looked at the baseline. We took into consideration the existing National Health Insurance Fund (NHIF) and what were the ranges of payment,” she explained.
“When we looked at it, the person who was paid the most is anybody earning Ksh10,000 and below.”
As per the CS, individuals in this group had a 5 percent deduction for NHIF, while those with higher incomes paid a minimal sum.
Providing a case involving President William Ruto, she clarified that the Head of State was contributing merely 0.01 percent of his total income to NHIF.
CS Nakhumicha commented that the Ministry opted to address the inequity and ensure consistent percentage deductions.
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The actuarial scientists were provided with information on the required funding for health facilities to determine a consistent percentage.
At the Level 6 Hospitals within the tertiary level, the Health Ministry requires an expenditure of Ksh46 billion to guarantee the continuous provision of health services.
“Secondary level consisting of Level 4 and 5 we found Ksh130 billion was needed while primary level consisting of community health promoters and Level 1 and 2 hospitals need Ksh80 billion,” the CS explained.
Using the computed figures, the actuaries determined a deduction of 2.75% from the gross income, as indicated by the CS.
The required minimum contribution to the SHIF is set at Ksh300. In contrast to previous practices where NHIF focused on salaried workers, the updated deductions will now be compulsory for all Kenyan citizens.
The national government will assist vulnerable households that are unable to meet the minimum required deductions, covering their contributions.
How We Arrived At A 2.75 Per Cent Deduction For Social Health Insurance Fund – Nakhumicha