NHIF Drops 43pc of Members for Defaulting on Contributions

Economic troubles have forced 8.8 million, or 43%, of National Health Insurance Fund (NHIF) members, to fall behind on their monthly payments, so forcing them to pay for their own medical expenditures out of pocket.

According to the most recent NHIF data for the fiscal year that ended in June 2022, there were 8.8 million dormant members, up from 5.03 million the year before, which caused the insurer to fall short of its aim of collecting Sh90.57 billion in premiums during the review period.

Membership increased to 15.4 million from 13.94 million, but only 6.7 million and 5.3 million of them were considered active. The NHIF attributes the faster increase in delinquent contributions to economic challenges.

“The target was not achieved due to macro-economic factors in the country which caused companies to downsize, reduce salaries and some to close,” said NHIF in a health sector report made public by the Treasury.

“The informal sector has also faced financial challenges caused by the poor economic conditions thus making it difficult for members of this sector to make their voluntary contributions to the fund and adverse selection.”

According to the compensation scale, people in the formal sector contribute between Sh150 and Sh1, 700 per month, while voluntary donors, who are often drawn from the informal sector, pay Sh500 a month to the NHIF.

Typically, registered members who have fallen behind on their monthly contributions are prohibited from using their insurance benefits to pay for medical expenses.

NHIF mandates that members pay the arrears first if they have unpaid premiums, which forces them to pay the costs out of pocket.

Occasionally, the fund offers defaulters a chance to pay Sh1, 500 to reinstate their membership, but they must wait three months before they are again eligible for the coverage.

According to the fund, premiums collected increased by 30% from Sh60.78 billion in the fiscal year 2020–2021 to Sh78.84 billion in the time period under consideration.

Benefits given out, on the other hand, increased by 45 percent, from Sh49.04 billion to Sh71.34 billion. Contrary to the prior decade, when many people avoided hospitals out of concern that they would get the contagious Covid-19 virus, more individuals were visiting hospitals, which contributed to the sharp increase in compensation.

As a result of the shilling’s depreciation versus the dollar, the price of prescription drugs and medical treatments has also risen, requiring healthcare providers to pass the extra costs on to insurance companies and patients who pay out of pocket.