NAIROBI, Kenya, Mar 28- Kenya Employees will from next month pay higher monthly contributions to the National Health Insurance Fund (NHIF) after the High Court threw out a case by the Central Organisation of Trade Unions (COTU) that had blocked the increment.
The increase was expected to be painful to a huge fraction of the working class, who would now take home less pay at the end of the month.
NHIF Chief Executive Officer Richard Kerich termed the ruling as a ‘breakthrough’ and said the new rates would see members benefit from a comprehensive outpatient and inpatient cover as the country moves towards providing universal health care.
“These services are going to be enjoyed by all our members whether you are contributing the least or the most,” he said at a Press Conference immediately after the court’s decision.
This would be a deviation from the current arrangement where the national health insurer covers only inpatient bed charges for members.
The service providers would be all government health facilities and accredited mission and private hospitals.
“We did a pilot project in Mumias and Nairobi in 2009 and immediately thereafter we gazetted the revised rates in July 2010 after which there were numerous court cases,” Kerich recounted.
The pilot was done for eight months.
Kerich said the fund would hold a special board meeting on Thursday to discuss the implementation of the court ruling.
“We want to implement the gazetted rates immediately so that our members can start accessing the services as early as 1st of May which means the deductions will have to be made by the end of April,” he said.
High Court judge Justice Mohammed Warsame on Wednesday ruled that the petition filed by COTU had no merit and gave NHIF the go ahead to implement their new contributory rates.
Justice Warsame was of the view that the matter having been determined by the Industrial Court, a judicial review Court could not set aside orders that were reached by the latter court.
“The High Court cannot purport to sit as an appeal court to determine COTU’s grievances,” Justice Warsame said in his ruling.
Lawyer Judy Guserwa acting on behalf of COTU had argued that NHIF’s drastic decision was a form of imposing tax on members without their approval or consent.
She argued the revision of rates was an illegality in law and should be disregarded adding that NHIF did not have powers to do so under the NHIF Act.
COTU also claimed that if the newly gazetted increments took effect the board would collect contributions without express statutory contributions.
They further argued that the NHIF Board cannot levy taxes through subsidiary legislation as sections 48 and 99 of the Constitution requires the Parliament to approve all taxes.
“Any increment in taxation requires parliamentary approval because such drastic powers through subsidiary legislation by unelected board erodes and affronts the essence of democracy,” COTU argued.
The ruling would now see the minimum NHIF contribution rise from Sh320 per month to Sh2, 000 for people earning a monthly gross salary of Sh100, 000 and above.
Those earning between Sh50, 000 and Sh99, 999 gross salary would fork out Sh 1,500 per month.
Formal sector workers in the lowest salary band of less than Sh5, 000 per month would pay Sh150 while the self employed would remit Sh500 per month.
The fund’s managers said the increments were necessary to boost the scheme’s ability to meet the high cost of medical services that have increased five-fold since 1990, pushed by a steady rise in doctors’ fees, food, medicine and equipment.
“We all know that there is nothing that can be given for free, someone must contribute, give sacrifice and part of the sacrifices that we can give as employees of this country is part of our earnings,” the funds CEO said.
The last review was done in 1990 by the then Minister of Health Mwai Kibaki who is the current President of Kenya.