Eyes now turn to Parliament over NHIF rates row

Debate on how much a member should pay to the National Hospital Insurance Fund (NHIF) could be headed to Parliament after the public medical insurer said the law demands that premiums be tied to gross income.

That statement now means that workers could find themselves paying varying premiums over time because the gross earnings – which includes different allowances - keep changing.

NHIF Chief executive Simeon ole Kirgotty has said that only a change in law would enable his agency peg monthly contributions on basic pay as demanded by the Federation of Kenya Employers (FKE).

“On the issues of deductions being made on payees’ basic salary and not gross pay, reference has been made to the NHIF Act that states the basis is total income,” Kirgotty said in a statement.

Unless the law is reviewed to accommodate the wishes of employers, a position reiterated by FKE, the provision could have delivered a major win for the public insurer.

“Any need to review this would also be through the laid down legal procedure of amending an Act of Parliament,” said Mr Kirgotty, adding that NHIF is in consultations with the FKE on the matter.

FKE Executive Director Jacqueline Mugo has staged the strongest opposition to the formula which came into effect on May 1. Workers, Ms Mugo has stated, should have their monthly contributions tied to the basic pay which is more predictable than the gross pay.

“Gross salary includes allowances such as overtime, house and transport. For instance, this month, an employee will have overtime and in another it will be absent,” she said last week in her objection.

Actual work

Overtime allowance is the least predictable because it can only be determined after the actual work has been done, and would typically depend on the immediate demands such as a factory breakdown for an engineer.

“This means the employee will fall in different salary categories and, therefore, pay different rates. At the end of the day, he or she will be paying more. That money will be difficult to trace. That is stealing from workers,” Mugo said.

“FKE is not entirely against the new rates by the public insurer but is only demanding transparency on how the funds are managed and value for money,” she added.

From May 1, members will contribute a revised monthly premium of between Sh150 and Sh1,700, depending on one’s gross income. Previously, the highest contributors paid Sh320 a month, while the lowest was Sh30.

Private insurance firms that The Standard talked to, have also raised objections to the higher premiums to NHIF, terming them as additional taxes with little value for the members.

However, Central Organisation of Trade Unions (Cotu) says that the new NHIF rates are above board. It stated that it was among the organisations that pushed for the enhancement of the rates to help Kenyans access healthcare affordably.

“We wish to dissociate Cotu from those clamouring for the suspension of the new rates since Cotu was part and parcel of negotiations for the new rates,” it said in a statement sent to newsrooms on Friday.

Outpatient care

NHIF yesterday for the first time announced the healthcare facilities that had been selected to provide the enhanced medical services – which now include outpatient care.

A total of 1,145 health facilities have been selected as the preferred outlets that will provide outpatient services across the country. Of thesefacilities, 548 are public hospitals and health centres.