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Amendments to the NHIF bill: the devil is in the details

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Amendments to the NHIF bill: the devil is in the details


Here it is necessary to create a process that ensures full compliance with this legal provision without being overly bureaucratic, while predicting fraudulent trends before they become the norm. FILE PHOTO | NMG

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  • Some of the proposed reforms are not unique; They have been implemented by other countries and there is an opportunity to take advantage of cross-country learning platforms to reduce the learning curve for Kenya.

The government-backed National Hospital Insurance Fund bill (amendment) before the National Assembly proposes significant changes in the administration and implementation of the scheme.

These changes are in the wings of reforms that began two years ago to reposition the National Hospital Insurance Fund (NHIF) as a strategic buyer.

Strategic purchasing is a concept rooted in the understanding that countries do not have unlimited resources and to make the most efficient use of available resources, the buyer must make deliberate use of information to allocate resources to priority areas.

This requires people who are trained to make difficult decisions, both technically and politically. Therefore, the NHIF leadership choice is to take these critical skills into account.

One of the best parts of the amendments is that the private insurer incurs the first charge for beneficiaries with other health insurance plans. That said, the implementation must be fully thought out.

How does the scheme verify that a claim sent to you is legitimate and that the private insurer has already paid everything owed? How does NHIF prevent collusion to circumvent this requirement?

Here it is necessary to create a process that ensures full compliance with this legal provision without being overly bureaucratic, while predicting fraudulent trends before they become the norm.

For NHIF to be sustainable, it needs to have sufficient funds for its activities. With the proposed amendments, the NHIF will receive additional funds from employers who will make contributions equal to what the employees are required to pay.

It will also be mandatory for all Kenyan residents over the age of 18 to contribute to the fund. Both changes are commendable, especially the fact that there is a penalty for employers who do not remit this matching contribution in a timely manner. But the devil is in the details.

How is the government going to enforce the mandatory contribution? Wage contributions will be easy to track and collect, but what about those from the informal sector? Here are some ideas to consider when addressing this concern and other issues related to mandatory contributions.

The scheme will need to intensify mobilization and registration with vigorous marketing, frequent communication with community stakeholders, and dissemination of scheme success stories in contextually relevant ways, to increase buy-in, deep understanding of the scheme’s benefits and why everyone should contribute. .

Rwanda has been able to achieve high enrollment in the country’s community health insurance (CBHI) plan, in part because there is an ingrained culture of solidarity that makes people want to contribute to the plan for the betterment of others.

At the village level, fundraising activities are carried out for families who cannot pay for themselves, as villages pride themselves on having 100% enrollment rates. Can this be replicated in Kenya?

How will the government determine the indigent to subsidize? Although the government has pledged to pay one million poor households, does that represent the entirety of the indigent in Kenya?

There has to be a rigorous system to identify the poor and vulnerable. There are examples from across the continent to learn from.

Rwanda has used its own socio-economic categorization system, ubudehe which classifies the entire population into five groups based on income, with a total subsidy for enrollment in the CBHI scheme for the lowest socioeconomic group.

To further increase NHIF funding, especially to subsidize the poor and vulnerable, the government can explore cross-subsidies from the private sector. In Rwanda, other private insurers contribute five percent of their premiums to the CBHI scheme.

In Nigeria, all health insurance companies contribute 1% of their premiums to the National Health Insurance Scheme. The same can be done in Kenya to ensure that the NHIF fulfills its mandate as the insurer of last resort.

It is also important to consider the long-term implications of collecting premiums for the population and the challenge of verifying mandatory contributions.

Is the financing received worth the administrative cost of collecting premiums from the entire country? Is there a possibility now or in the future to consider tax financing for the NHIF, especially in a country with a huge informal sector that is difficult to collect premiums from?

A good example of a country that has followed this route is Ghana. Although the country still has some initial challenges, Kenya can learn some lessons from the context and implementation.

If Kenya decides to go this route, it can also continue to increase NHIF funding from other sources of funding, including formal or organized private sector payroll taxes.

The proposed amendments are a step in the right direction. However, there are potential landmines in its implementation. This is the time for the NHIF team to work with other stakeholders to identify and anticipate potential challenges and put mitigation plans in place.

Some of the proposed reforms are not unique; They have been implemented by other countries and there is an opportunity to take advantage of cross-country learning platforms to reduce the learning curve for Kenya.

Dr. Olalere is Executive Director of the Africa Strategic Purchasing Resource Center

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