THE SOCIAL HEALTH INSURANCE BILL, 2023
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
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Executive
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Final
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Three New Healthcare Funds Established
The Bill establishes three distinct funds under Parts III, IV, and V to manage health financing and service delivery:
- Primary Healthcare Fund: Financed by National Assembly appropriations and grants to purchase primary healthcare services from levels 1 to 3 health facilities.
- Social Health Insurance Fund: Financed by mandatory household contributions to cover standard healthcare benefits.
- Emergency, Chronic and Critical Illness Fund: Funded by government appropriations to cover emergency treatments and chronic illnesses once standard insurance covers are exhausted.
Mandatory Registration and Prerequisite for Government Services
Under Clause 26, every Kenyan citizen and non-Kenyan ordinarily resident in Kenya for more than 12 months must register. Newborn children must be registered at birth. Crucially, Clause 26(5) requires any person eligible for registration to show proof of active registration with the Social Health Insurance Fund to access public services from national or county government entities.
Income-Based Mandatory Household Contributions
Contributions to the Social Health Insurance Fund (Clause 27) are structured based on income streams:
- Salaried Households: Paid via a monthly statutory deduction from wages by the employer at a prescribed rate.
- Non-Salaried Households: Paid via an annual contribution determined by a "means testing instrument" assessing various socio-economic factors.
- Indigent and Vulnerable Persons: Sponsored by government funds appropriated by Parliament and County Assemblies.
- Late Payment Penalty: Failure to pay contributions on time attracts a penalty equal to 10% of the unpaid amount.
Up to KSh 10 Million Penalty for Asset Misappropriation
Clause 49 introduces strict penalties for fraud and fund abuse:
- Asset Misappropriation: Anyone who misappropriates Fund assets face a fine of up to KSh 10 million, imprisonment for up to 5 years, or both.
- Fraudulent Claims/Impersonation: Making false statements to obtain benefits carries a fine of up to KSh 1 million, imprisonment for up to 5 years, or both.
- Falsifying Health Records: Healthcare facilities altering clinical records face a fine of up to KSh 500,000, suspension, or removal from the register.
Bill No.
No. 58 of 2023
Gazette No.
Supplement No. 164
Sponsor
Kimani Ichung'wah
Background
The Social Health Insurance Bill, 2023 seeks to establish a comprehensive framework to manage social health insurance and deliver Universal Health Coverage in line with Article 43(1)(a) of the Constitution of Kenya. It repeals the National Health Insurance Fund (NHIF) Act, 1998 (No. 9 of 1998) to transition Kenya's public health insurance regime to a centralized, multi-fund system governed by a newly created entity.
Key Amendments
- Repeal of NHIF: The National Health Insurance Fund Act, 1998 is fully repealed (Clause 54).
- Establishment of the Social Health Authority: Clause 4 establishes the Social Health Authority as a body corporate to manage all funds, register beneficiaries, contract healthcare providers, and manage claims.
- Creation of Three Health Funds:
- Primary Healthcare Fund (Clause 20): Formed to purchase primary healthcare services from level 1 to level 3 health facilities.
- Social Health Insurance Fund (Clause 25): Formed to provide a broad range of healthcare benefits to registered contributors and their beneficiaries.
- Emergency, Chronic and Critical Illness Fund (Clause 28): Formed to cover chronic illnesses after standard insurance covers are depleted, as well as critical emergency services.
- Claims Management Office (Clause 35): Established within the Authority to review, process, validate, and issue pre-authorizations for healthcare claims, with the option to delegate claims management to licensed medical insurance providers or brokers.
New Obligations
- Mandatory Registration (Clause 26): Every Kenyan citizen and non-Kenyan ordinarily resident in Kenya for more than 12 months must register. Newborn children must be registered at birth.
- Prerequisite for Government Services: Under Clause 26(5), any person registerable as a member must show proof of registration to access public services from national and county governments or their entities.
- Compulsory Contributions (Clause 27):
- Salaried households must pay a monthly statutory deduction.
- Non-salaried households must pay an annual contribution determined using a "means testing instrument" that evaluates socio-economic parameters.
- Non-Kenyans resident for over 12 months must pay at rates prescribed under the Act.
Penalties
- Late Payment Penalty (Clause 27(6)): A contributor who fails to pay by the due date is liable to a penalty of 10% of the unpaid contribution amount.
- Misappropriation of Fund Assets (Clause 49(2)): Conviction for misappropriating or assisting in the misappropriation of Fund assets carries a fine not exceeding KSh 10 million, imprisonment for up to 5 years, or both.
- Fraud and False Representation (Clause 49(3)): Making false statements to obtain benefits carries a fine not exceeding KSh 1 million, imprisonment for up to 5 years (60 months), or both.
- Falsification of Health Records (Clause 49(5)): A healthcare provider or facility altering or falsifying clinical records faces a fine not exceeding KSh 500,000, suspension, or removal from the register.
- General Penalty (Clause 53): For any offense under the Act where no specific penalty is provided, the penalty is a fine not exceeding KSh 1 million, imprisonment for up to 2 years, or both.
Transitional Provisions
The First Schedule details the transfer of assets, liabilities, and staff from the winding-up NHIF Board to the new Social Health Authority:
- Asset Transfer: All funds, assets, and properties (movable and immovable) previously held by the NHIF Board vest directly in the new Authority.
- Staff Transition: The NHIF Board shall wind up within one year. Existing staff may apply for positions within the new Authority if qualified, retire from public service, or be redeployed within the broader public service.
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