NHIF charges to go up from next month

New NHIF deductions to be made by the end of April /FILE

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.

  • Irware

    No way, why structure it as a PAYE system?  why some people pay less and others more to only get the same dubious health sercies, something is not adding up
     

  • Mathiaskinyoda

    I support the new increment though I have a query: What will be the amount limit for the new comprehensive outpatient and inpatient service. please advise.   

  • Malingumu

    The whole issue is another scam not based on any substantive policy.What happens to employees who lose their job at the time they are contributing 2000/= .Will their contribution be revised to reflect their present financial income? .I have noted self employed will be contributing 500/= per month. Does that mean some of the CEO’s running their own firms will be paying less than what some of their staff may be contributing .eg  2000K? What happens to traditional corrupt culture associated with fund mismanagement both within the insurance and without (fraud in partnership with hospitals)? Is it not time our leaders question outdated formula used  in determining PAYE .The first 40,000/= that attracts minimum tax deduction is no longer consistent with current remunerations.Wazalendo who pay their taxes can hardly save 1/4 of what they contribute in taxes. Perhaps MP’s will start seeing sense when reality of paying tax dawns on them.

  • Mlikamwizi

    I agree with Malingumu. We have tried to warn people on the scam at NHIF after the civil servants and teachers scheme begun. Scroll to the end of this blog

    http://freelancegynae.wordpress.com/2012/01/11/are-we-staring-at-the-biggest-scam-ever-in-healthcare/

    soon after we realized that even the ICT system they were using was non-compliant to managing claims e.g. security, detailed reported, exclusion, limits, fraud alert etc they hurriedly tendered for a new system 2wks ago. At the end of the above blog you will see how 100′s of million were paid out to ghost claimant and non-certified clinics. What most Kenyans seem to forget is this you sweat going into the pockets of a cartel that has gone from milking the cow to slaughtering it!! there should be a serious probe done on this fund.

  • Kiwanzenza

    I suggest its treated like NSSF’s where by it will reduce the tax liabilty of kenyans.

  • MOSES KARIUKI

    This is total Bull!!! Who came up with the rates chart? How can a guy earning say 1 M contribute 2K while a guy earning 50K contribute the same 2K. The rich guy will never notice. This scheme is not fair.

  • MOSES KARIUKI

    This is total Bull!!! Who came up with the rates chart? How can a guy
    earning say 1 M contribute 2K while a guy earning 50K contribute the
    same 2K. The rich guy will never notice. This scheme is not fair. How can the few people who are working pay hospital bills for the whole Country while the super rich enjoy some kind of relief? I just dont get.