Health CS Explains Rationale Behind 2.75% SHIF Deductions

Health CS Explains Rationale Behind 2.75% SHIF Deductions

Health CS Explains Rationale Behind 2.75% SHIF Deductions

On Wednesday, January 24, Susan Nakhumicha, the cabinet secretary for health, disclosed the reasoning behind the deduction of 2.75 percent of each Kenyan’s gross income for the Social Health Insurance Fund (SHIF). In an interview with Citizen TV, Nakhumicha said that actuarial scientists based at the Ministry of Health had suggested the proportion.

She clarified that the scientists’ calculation of the percentage was based on the total amount of money required to support Kenya’s public health facilities. We started by examining the baseline. We considered the ranges of payments and the current National Health Insurance Fund (NHIF),” the spokesperson said.

“When we looked at it, the person who was paid the most is anybody earning Ksh10,000 and below.”According to the CS, this category was being deducted up to 5 per cent towards NHIF while top earners paid a negligible amount.

She clarified that the Head of State was contributing as little as 0.01 percent of his gross income to the NHIF, using President William Ruto as an example. According to CS Nakhumicha, the Ministry made the decision to address the injustice and guarantee that the deductible percentages remained stable.

The actuarial scientists were given data regarding the amount of funding required by health facilities in order to determine the constant percentage. The Health Ministry must invest Ksh46 billion at the tertiary level, which includes Level 6 Hospitals, to guarantee that medical services are offered continuously.

The CS clarified, “We found that Ksh130 billion was needed at the secondary level, which consists of Level 4 and 5 hospitals, while Ksh80 billion is needed at the primary level, which consists of community health promoters and Level 1 and 2 hospitals.” The actuaries came at 2.75 deductions on gross income as disclosed by the CS based on those computations.

Unlike in the past when NHIF targeted salaried employees, the new deductions will be mandatory for every Kenyan, with a minimum required contribution to SHIF of Ksh 300. The federal government will make up the difference between the minimum required deductions and the contributions made by vulnerable households.

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