Opinion: Can Kenya’s New Health Fund Overcome Its Challenges?

Kenya’s healthcare system is at a crossroads.

The recent launch of the much hyped Social Health Insurance Fund (SHIF), managed by the Social Health Authority (SHA), promised to usher in a new era of universal healthcare. However, this ambitious initiative has encountered formidable challenges, with many Kenyans now questioning whether SHIF can live up to its lofty goals.

As of October 2024, over 12.7 million Kenyans had registered with SHA, and contributions are set at a minimum of Ksh 300 per month for self-employed individuals, with salaried employees contributing 2.75% of their gross salary.

The government anticipates that SHIF will collect around Ksh 133 billion in its first year, with projections rising to Ksh 148 billion annually as it scales up.

This revenue, more than double what was collected by the previous National Health Insurance Fund (NHIF), is essential for achieving the fund’s aim: comprehensive healthcare for all Kenyans.

Yet, despite this optimistic forecast, the transition from NHIF to SHIF has exposed a wide funding gap that has thrown healthcare facilities into a financial crisis.

Reports indicate that healthcare providers are already owed billions in reimbursements, a debt carried over from the NHIF. This funding gap has left health facilities cash-strapped, jeopardizing service delivery and heightening the sense of instability surrounding SHIF.

A key challenge lies in the informal sector, where many Kenyans struggle to maintain a consistent income, let alone afford health insurance premiums. Without a stable revenue stream from this population, the financial sustainability of SHIF remains uncertain. The government’s reliance on these contributions might make the fund’s projections unrealistic, given that financial constraints often prevent low-income earners from prioritizing health insurance.

Moreover, the lack of infrastructure in rural areas continues to worsen these financial pressures. While urban centers have relatively better-equipped facilities, rural areas often lack basic medical infrastructure. Consequently, the country’s quality of healthcare remains unevenly distributed, depriving rural populations of essential services. If the government aims to make SHIF a truly national solution, it must address this infrastructure gap by investing in rural facilities and upgrading resources. The need for well-equipped clinics, medical supplies, and trained personnel in these underserved areas is urgent, as these facilities form the backbone of the public health system.