An Act of Parliament to establish the framework for the management of social health insurance, to provide for the establishment of the Social Health Authority and to give effect to Article 43(1)(a) of the Constitution.
| PROPOSED PROVISION FOR AMENDMENT | PROPOSED AMENDMENT | OUR COMMENTS |
|---|---|---|
| Clause 2 Interpretation | “beneficiary” means a person who: a. is a contributor; b. has not attained the age of twenty-one years, has no income of his own and is living with the contributor; c. has not attained the age of twenty-five years, is undergoing a full-time course of education at a university, college, school or other educational establishment or serving under articles or indenture with a view to qualifying in a trade or profession and is not in receipt of any income other than a scholarship, bursary or other similar grant or award; d. is a person with disability and is wholly dependent on and living with the contributor; or e. is a spouse of the contributor. | This definition has been retained from the National Health Insurance Fund Act No. 9 of 1998 (“the NHIF Act”). Secondly, the inclusion of paragraph (c) is a good proposal as students in tertiary institutions and indentures will be able to receive health care services. Thirdly, the inclusion of paragraph (d) is a good proposal as it ensures compliance with Article 54 of the Constitution. |
“chronic illness” means a condition that lasts one year or more and requires ongoing medical attention or limit activities of daily living or both. | The definition has been provided to apply to patients who require ongoing treatment to control symptoms, prevent complications and maintain quality of life. A good example is patients who undergo dialysis. |
|
“critical illness” means a serious and potentially life-threatening condition that demands urgent medical intervention and can have a substantial impact on a person’s health, well-being and quality of life. | Effective treatments can alleviate symptoms, manage pain and improve the overall quality of life for individuals suffering from critical illnesses. This allows patients to maintain a certain level of normalcy and engage in daily activities despite their health challenges. |
|
“emergency treatment” means the necessary immediate health care that must be administered to prevent death or worsening of a medical situation. | This definition has been retained from the National Health Insurance Fund Regulations 2023 (“the NHIF Regulations”). Emergency treatment provides immediate medical care, which is often critical in life-threatening situations. Quick response and immediate interventions can prevent further deterioration of a patient's condition. Secondly, emergency treatment stabilizes patients' conditions, making them suitable for further diagnostic procedures, surgeries or transfers to specialized healthcare facilities. Stabilization can be crucial for patients with severe injuries or medical conditions. |
|
“Funds” means the Primary Healthcare Fund established under section 20, the Social Health Insurance Fund established under section 25 and the Emergency, Chronic and Critical Illness Fund established under section 28. | The segregation of the Funds is a good proposal as it allows the government to efficiently allocate resources to the respective Funds. For example, the Emergency, Chronic and Critical Illness Fund may receive the highest funding as it has patients suffering from chronic illnesses who require regular medical treatment. |
|
“household” means a social unit comprising of an eligible contributor, whether contributing by self or paid for, and their beneficiaries, or who share the same socal-economic needs associated with consumption and production. | This is a new definition that was not present in the NHIF Act. The inclusion of this definition is a good move as it will increase the number of people who will be able to receive healthcare services. |
|
“indigent” means a person who is poor and needy to the extent that the person cannot meet their basic necessities of life. | We propose the deletion of this definition. An indigent person has been included in the definition of “vulnerable person” in clause 2 of the Bill. |
|
“means testing” means a method that uses the means testing instrument to determine whether an individual or a household has the ability to pay for their social health insurance premium. | By assessing an individual's financial capacity, means testing allows the government to target financial assistance and subsidies specifically to those who need them. This ensures that resources are directed to individuals and families with lower incomes who might otherwise struggle to afford the social health insurance premium. |
|
“means testing instrument” means a set of indicators that capture various socio-economic aspects of an individual or a household for purposes of conducting a means testing. | A means testing instrument prevents individuals from being overburdened with healthcare costs. It ensures that social health insurance premiums are set at levels that individuals and households can reasonably afford. This prevents financial strain and ensures broader participation in the health insurance system. On the other hand, using a means testing instrument can be expensive as significant resources are required for conducting staff training and data collection. |
|
“primary healthcare” means essential healthcare based on practical, scientifically sound and socially acceptable methods and technology that is made universally accessible to individuals and families in the community at every stage of their development, through their full participation and at an affordable cost to the community and country, in the spirit of self-reliance and self-determination. | Primary healthcare offers continuous and comprehensive healthcare which ensures that patients receive consistent and coordinated healthcare services over time. This continuity is essential for treating critical and chronic illnesses. Secondly, primary healthcare services are usually accessible, convenient and affordable. This accessibility encourages people to seek medical treatment before their health issues worsen. |
|
"risk spreading" means the transfer, sharing or distribution of the risk insured as between one or more insurance companies or other providers with a view to reducing the financial cost in the eventual happening of the insured event hereby referred as a loss for special, enhanced or negotiated scheme. | Risk spreading helps insurance companies manage their capital more effectively. By transferring a portion of their risk, insurers can protect their financial stability and ensure they have the resources to pay claims, even in the face of significant losses. Secondly, risk spreading allows insurance companies to diversify their exposure. By sharing risks with other insurers, they can balance their portfolios and reduce the impact of large, unexpected claims on their financial stability. Thirdly, risk spreading fosters a competitive insurance market. Insurers are more willing to introduce innovative products and services when they can transfer some of the associated risks, leading to a more dynamic and consumer-friendly insurance industry. |
|
“spouse” means the wife or husband of a contributor who is for the time being is named as such by the contributor for that financial year. | This allows the spouse to be a beneficiary of the contributor for that financial year. |
|
| “tariff” means the rates or fees that are paid to healthcare facilities or healthcare providers for services covered under this Act to deliver the most efficient and cost-effective care to patients. | Payment of tariffs allows healthcare facilities to allocate resources efficiently. These funds are used to maintain facilities, purchase medical equipment, hire skilled staff and ensure the availability of necessary supplies, all of which are vital for providing quality healthcare services. |
|
“Universal Health Coverage” means that all individuals and communities receive the health services they need including the full spectrum of essential, quality health services from health promotion to prevention, treatment, rehabilitation, and palliative care without suffering financial hardship. | Universal Health Coverage ensures that essential healthcare services are accessible to all, irrespective of their socio-economic status, gender, ethnicity or geographical location. It promotes equity by providing equal access of healthcare services which reduces disparities in health outcomes. |
|
“vulnerable person” means a person who needs special care, support or protection, including the orphaned and vulnerable children, widows or widowers, person with disability, elderly persons or indigent due to a risk of abuse or neglect and who has been identified relevant government body. | Vulnerable persons often face significant health disparities. Providing healthcare services helps bridge the gap, ensuring that everyone regardless of their socio-economic status has access to healthcare services. |
|
Clause 3 Objects of the Act | The objects of this Act shall be to: a. provide a framework for improved health outcomes and financial protection in line with the right to health and Universal Health Coverage; b. realign healthcare systems, processes and programs for responsiveness, reliability and sustainability of healthcare in Kenya; c. enhance the pooling of resources and risks based on the principles of solidarity, equity and efficiency so as to guarantee access to healthcare services to all; and d. promote strategic purchasing of healthcare services. | One of the fundamental objects of the Bill is to achieve Universal Health Coverage. This means ensuring that all individuals, regardless of their socio-economic status, have access to essential healthcare services without facing financial hardship. |
PART II — ESTABLISHMENT OF THE SOCIAL HEALTH AUTHORITY |
||
Clause 4 Establishment of the Social Health Authority | There is established an Authority to be known as the Social Health Authority. The Authority shall be a body corporate with perpetual succession and a common seal and shall, in its corporate name, be capable of: a. suing and being sued; b. taking, purchasing or otherwise acquiring, holding, charging and disposing of movable immovable property; c. receiving, investing, borrowing money; and d. doing or performing such other things or for the proper performance of its acts necessary functions under this Act. The provisions of the First Schedule shall have effect with respect to the Authority. | The purpose of this clause is to give the Authority legal capacity to act in its own name. |
Clause 5 Functions of the Authority | The functions of the Authority shall be to: a. register the beneficiaries in accordance with this Act; b. manage the Funds established under this Act; c. receive all contributions and other payments required by this Act to be made to the Funds; d. contract healthcare providers and healthcare facilities upon successful certification by the relevant body; e. consider and make payments to contracted healthcare providers and healthcare facilities out of the Funds in accordance to the provisions of this Act; and f. develop guidelines for the operations implementation of the Funds established under this Act; g. establish sectoral linkages management and growth of the Funds; h. monitor and evaluate programs under the Funds; i. receive and address complaints that may arise from the implementation of this Act; j. advise the Cabinet Secretary on matters of social health insurance including the formulation of policies; k. implement all government policies on social health insurance and related functions; and l. perform any other function conferred on it by this Act or any other written law. | The functions of the Authority have been clearly stated to ensure that it does not perform tasks that are ultra vires. |
Clause 7 The Board of the Authority | The Authority shall be managed by a Board which shall consist of: a. a non-executive chairperson, who shall be appointed by the President; b. the Principal Secretary in the ministry for the time being responsible for matters relating to health or a designated representative; c. the Principal Secretary in the ministry for the time being responsible for matters relating to finance or a designated representative; d. the Director-General for Health; e. The Attorney-General or a designated representative; f. one person, not being a Governor, nominated by the Council of County Governors with knowledge in field of finance, accounting, health economics, law or business and management; g. one person, not being a public officer with proven experience in matters of health insurance, health financing, financial management, health economics, healthcare administration; h. four persons, not being public officers, nominated by: I. the Kenya Medical Association; II. the informal sector association; III. healthcare providers; and IV. the Central Organization of Trade Unions-Kenya. i. the chief executive officer of the Authority, who shall be an ex-officio member of the Board. The members of the Board nominated under subsection (1) (f), (g) and (h) shall be appointed by the Cabinet Secretary by notice in the Gazette. The Chairperson and the members of the Board appointed under subsection (1) shall serve for a term of three years and shall be eligible for re-appointment for one further term of three years. In appointing persons as members of the Board under subsection (1) (f), (g) and (h), the Cabinet Secretary shall ensure that the appointments afford equal opportunity to men and women, youth, persons with disabilities, minorities and marginalized groups and ensure regional balance. | For sub-clause (1) (a), we propose that the chairperson is appointed through a fair, transparent and competitive process. A fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the organization. Secondly, this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. |
Excluding the chief executive officer who is an ex-officio member, the Board has an odd number of members. This is a good proposal. When there’s an even number of members who can vote, there’s a greater risk of deadlocks. This makes it difficult for the Board to make decisions, resolve conflicts or move forward with its agenda. An odd number ensures that there will always be a majority decision. |
||
The functions of the Board have not been listed in the Bill. We propose that the functions are listed in this clause. This proposal removes the ambiguity present by clearly listing the Board’s functions. |
||
Clause 8 Qualifications for appointment | A person shall be eligible for appointment as a Chairperson or member of the Board under section 7 (1)(a), (g) and (h) if that person: a. is a citizen of Kenya; b. holds a minimum of a bachelor’s degree from a university recognized in Kenya; c. has knowledge and experience of not less than ten years in data science, information technology, health governance, health administration, health policy, finance or economics, five of which shall be at managerial level; and d. meets the requirements of Chapter Six of the Constitution. A person shall not be eligible for appointment as a member of the Board under section 7 if that person: a. has at any time been convicted of a criminal offence and sentenced to a term of imprisonment exceeding six months; b. is declared to be of unsound mind; c. is an undischarged bankrupt; d. is a director, officer, employee or shareholder of any insurer, broker, insurance agent or any other member of the insurance industry, private health facility; or e. has been found in accordance with any law to have misused or abused a state office or public office or to have contravened the provisions of in a way to have contravened the provisions of Chapter Six of the Constitution. | Specifying qualifications provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. Secondly, the addition of sub-clause (1) (d) is a good proposal. Leadership and integrity principles ensure that persons appointed to government positions possess a strong commitment to ethical conduct. |
The addition of sub-clause (2) (d) is a good proposal as it ensures there is no conflict of interest. A member that doesn’t have a conflict of interest can make decisions that are in the best interests of the Board. Further, this ensures fairness and objectivity as the member is not influenced by personal gain or biases. |
||
Clause 9 Vacancy of office | The office of the chairperson or member of the Board shall become vacant if the holder: a. resigns from office by notice in writing to the appointing authority; b. is absent from three consecutive meetings of the Board without permission from the appointing authority; c. is adjudged bankrupt or enters into a composition scheme or arrangement with his creditors; d. is convicted of a criminal offence and sentenced to imprisonment for a term exceeding six months; e. is incapacitated by prolonged physical or mental illness; f. is otherwise unable or unfit to discharge his duties; or g. dies. | We propose the addition of timelines in this clause. This ensures that the vacant positions are filled within a prescribed period without delays. |
Clause 11 Delegation by the Board | The Board may, by resolution either generally or in any particular case, delegate to any committee of the Board or to any member, officer, employee or agent of the Board the exercise of any of the powers or the performance of any of the functions or duties of the Board under this Act. | Delegation optimizes resource allocation. It ensures that tasks are assigned to the most suitable individual, maximizing the use of available skills and expertise. |
Clause 12 Remuneration of members | The chairperson and members of the Board shall be paid such remuneration, fees, allowances and such other reimbursements as may be approved by the Cabinet Secretary in consultation with the Salaries and Remuneration Commission. | This proposal will be in line with Article 230 (4) (a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 13 Appointment of the chief executive officer | There shall be a chief executive officer of the Authority who shall be competitively recruited appointed by the Board. The chief executive officer shall hold office on such terms as the Board may, on the advice of the Salaries and Remuneration Commission, determine. | For sub-clause (1), a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Authority. Secondly, this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. |
For sub-clause (1), we propose the deletion of the word “Authority” and replacing it with the word “Board”. As per clause 7 (1) (i) of the Bill, the chief executive officer is an ex-officio member of the Board and not the Authority. |
||
| Sub-clause (2) is consistent with Article 230 (4) (a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
||
Clause 14 Qualifications for appointment as a chief executive officer | A person shall be qualified for appointment as the chief executive officer of the Authority if that person: a. has a minimum of a bachelor’s degree from a university recognized in Kenya; b. is an Advocate of the High Court of Kenya; c. Has at least ten years' knowledge and experience in health insurance, health financing, health economics, healthcare administration or any other relevant field; d. has served in a management level for a period of least five years; e. has not been convicted of an offence and is not serving a term of imprisonment; and f. meets the requirements of Chapter Six of the Constitution. The chief executive officer shall, subject to the directions of the Board, be responsible for the day-to-day management of the affairs and staff of the Board. The chief executive officer shall be administrator of the Funds established under this Act. In administering the Funds referred to in subsection (3), the administrator of the Funds shall: a. open and operate such banks with the approval of the Board and the National Treasury; b. supervise and control the day-to-day administration of the Funds established under this Act; c. in consultation with the Board, develop such policies as may be necessary for the attainment of the objects of the Funds established under this Act; d. consult with the Board on matters relating to the administration of the Funds established under this Act; e. cause to be kept books of accounts and other books and records in relation to the Funds established under this Act of all activities and undertakings financed from the Funds; f. with the approval of the Board, outsource services and enter into and sign commercial contracts or agreements in furtherance of the objects of the Funds established under this Act; g. prepare, sign and transmit to the Auditor-General, in respect of each financial year and within three months after the end thereof, a statement of accounts relating to the Funds established under this Act and showing the expenditure incurred from the Funds, and such details as the Public Sector Accounting Standards Board may prescribe from time to time, in accordance with the provisions of the Public Finance Management Act No. 18 of 2012 (“the Public Finance Management Act”) and the Public Audit Act No. 34 of 2015 (“the Public Audit Act”); h. prepare quarterly and annual financial and non-financial reports in a format prescribed by the Public Sector Accounting Standards Board and submit the same to the National Treasury with copies to the Controller of Budget and the Commission on Revenue Allocation; and i. implement any recommendations from the Board for policy guidance in furtherance of the objects and purpose of the Funds established under this Act. The existing government financial and procurement regulations shall, to the extent they relate to the administration of public funds established under the Public Finance Management Act, apply in the administration of the Primary Healthcare Fund, the Social Health Insurance Fund and the Emergency, Chronic and Critical Illness Fund. | For sub-clause (1), we propose the deletion of the word “Authority” and replacing it with the word “Board”. As per clause 7 (1) (i) of the Bill, the chief executive officer is an ex-officio member of the Board and not the Authority. Secondly, for sub-clause (1), specifying qualifications for appointment is a good proposal as it provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. |
Clause 15 Tenure of office of the chief executive officer | The chief executive officer shall hold office for a period of three years and shall be eligible for re-appointment for one further term of three years. | Term limits allow for a regular influx of new ideas and fresh perspectives. New appointments bring innovative approaches and solutions to existing challenges, promoting creativity and preventing stagnation. |
Clause 16 Corporation secretary | There shall be a corporation secretary who shall be competitively recruited and appointed by the Board on such terms as the Board may, on the advice of the Salaries and Remuneration Commission, determine. A person qualifies for appointment as the Corporation Secretary if that person: a. holds a bachelor’s degree in law from a university recognized in Kenya; b. has at least five years’ experience as a corporation secretary or a similar governance role; c. is a member in good standing of the Institute of Certified Public Secretaries of Kenya; and d. meets the requirements of Chapter Six of the Constitution. The corporation secretary shall be the Secretary to the Board and shall: a. in consultation with the Chairperson of the Board, issue notices for meetings of the Board; b. keep, in custody, the records of the deliberations, decisions and resolutions of the Board; c. transmit decisions and resolutions of the Board to the chief executive officer for execution, implementation and other relevant action; d. provide guidance to the Board on their duties and responsibilities on matters relating to governance; and e. perform such other duties as the Board may direct. | For sub-clause (1), this proposal will be in line with Article 230 (4) (a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
For sub-clause (1), a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Board. |
||
For sub-clause (2), specifying qualifications for appointment provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. |
||
Clause 17 Staff | The Board may appoint such staff as may be necessary for the proper discharge of the functions of the Authority under this Act, upon such terms and conditions of service as the Board may determine. | We propose that the salaries of the staff are determined by the Board in consultation with the Salaries and Remuneration Commission. This proposal will be in line with Article 230 (4) (a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 18 Protection from personal liability | No matter or thing done by a member of the Board, or an officer, employee or agent of the Authority shall, if the matter or thing was done in good faith in the execution of the functions or powers of the Authority, render the member, officer, employee or agent personally liable for any action, claim or demand whatsoever. Notwithstanding subsection (1), nothing in this section shall exempt a member of the Board, officer, employee or agent of the Authority from individual responsibility for unlawful or criminal act committed by the member of the Board, officer, employee or agent of the Authority. | This clause enhances accountability as a member, officer, agent or employee of the Board or Authority can be held liable for his/her actions. |
Clause 19 Common seal of the Authority | There shall be a common seal of the Authority which shall be kept in the custody of the corporation secretary and shall not be used except on the direction of the Board. The affixing of the common seal of the Authority shall be authenticated by the signatures of the chairperson and the chief executive officer and any document required by law to be made under seal and all decisions of the Board may be authenticated by the signatures of the chairperson and the chief executive officer. The Board shall, in the absence of either the chairperson or the chief executive officer, in any particular matter, nominate one member to authenticate the seal of the Authority on behalf of either the chairperson or the chief executive officer. | A common seal is used to authenticate documents, indicating that they have been formally approved or endorsed by the Authority. |
PART III – PRIMARY HEALTHCARE FUND |
||
Clause 20 Establishment of the Primary Healthcare Fund | There is established a Fund to be known as the Primary Healthcare Fund whose object shall be to purchase primary healthcare services from health facilities. | The Business Daily Newspaper dated 3rd October 2023 indicated that primary healthcare is capable of meeting 90% of the country’s health needs as it’s accessible to most of the population. This accessibility ensures that health services are available to everyone, regardless of their socio-economic status. |
Clause 21 Source of Funds | There shall be paid into the Primary Healthcare Fund: a. monies appropriated by the National Assembly; b. any grants, gifts, donations or bequests; c. monies allocated for those purposes from fees or levies administered; and d. monies accruing to or received by the Fund from any other source. | The allocation of funds to primary healthcare is a good proposal. In the Business Daily Newspaper dated 3rd October 2023, it indicated that the Primary Healthcare Fund is cost effective as it has a return on investment of up to KES. 16 for every KES. 1 spent. |
Clause 22 Expenditure of the Fund | There shall be paid out of the Fund payments in respect of any expenses incurred in pursuance of the object and purpose for which the Fund is established. The expenditure incurred on the Fund shall be limited to annual budget estimates prepared by the Authority at the beginning of the financial year to which they relate. Any revision of the approved budget estimates shall be referred to the Board for approval. | We propose the addition of timelines in sub-clause (3). This ensures that the revised budget is approved by the Board within a prescribed period without delays. |
PART IV – THE SOCIAL HEALTH INSURANCE FUND |
||
Clause 25 Establishment of the Social Health Insurance Fund | There is established a Fund to be known as the Social Health Insurance Fund. There shall be paid into the Fund: a. contributions under the Act; b. monies appropriated by the National Assembly for indigent and vulnerable persons; c. gifts, grants, innovative financing mechanisms or donations; d. funds from the national government, county governments and their respective entities for the administration of the compulsory public service employees’ insurance benefit scheme; and e. funds from an employer who is not a national government, a county government or their respective entities, for the administration of employee benefits. | For sub-clause (1) (b), we propose the deletion of the words “indigent and”. This is because the term “vulnerable person” has been defined in clause 2 of the Bill to include an indigent person. |
Clause 27 Contributions | The following persons shall be liable to contribute to the Fund under this Act: a. every Kenyan household; b. a non-Kenyan resident, ordinarily residing in Kenya for a period exceeding twelve months; c. the national government; d. the county government; and e. any other employer. Contributions under this Act shall be paid as follows: a. in the case of a household whose income is derived from salaried employment, by a monthly statutory deduction from the wages or salary by the employer at a rate prescribed under this Act; b. in the case of a household whose income is not derived from salaried employment, by an annual contribution of a proportion of household income as determined by the means testing instrument in the manner prescribed under this Act; c. in the case of households in need of financial assistance as determined by the means testing instrument, by the government at a rate apportioned from funds appropriated by Parliament and County Assemblies for that purpose as prescribed under this Act; d. in the case of persons under lawful custody, by the Government from funds appropriated by Parliament for that purpose at a rate prescribed under this Act; e. in case of a person who is a permanent resident in Kenya, by such person at a rate as may be prescribed under this Act; and f. in the case of any other person, by the person himself out of his own funds in the manner prescribed under this Act. Provided that the contributions under this section shall be paid at the time of Registration. A person referred to in subsection (2)(b) shall pay their contributions on an annual basis. A person shall only access healthcare services under this Act where their contributions to the Social Health Insurance Fund are up to date and active. The government shall ensure that premium financing products are provided for non-salaried persons for the payment of social health insurance. Any person who fails to pay any contribution in respect of any period on or before the day on which payment is due shall be liable to a penalty equal to ten percent of the amount due for contribution for the period which the contribution remains unpaid and the total annual contributions. A person shall pay all outstanding contributions and penalties accrued before resuming access to the healthcare services provided under this Act. | For sub-clause (2) (b), we propose that the contributions are paid on a monthly basis. Imposing annual contributions will impose a great financial strain on Kenyans. This will lead to default on payment of contributions. |
PART V – THE EMERGENCY, CHRONIC AND CRITICAL ILLNESS FUND |
||
Clause 28 Establishment of the Emergency, Chronic and Critical Illness Fund | There is established a Fund to be known as the Emergency, Chronic and Critical Illness Fund to: a. defray the costs of management of chronic illnesses after depletion of the social health insurance cover; and b. to cover the costs of emergency treatment. | Emergency treatment stabilizes patients in critical condition, ensuring that they are ready for further treatments, surgeries, or transfers to specialized facilities. This stabilization is vital for ensuring the patient's safety during transportation. Secondly, we propose that patients with chronic illnesses should have unlimited emergency, chronic and critical illness medical cover. This ensures that a patient does not use his own money to fund the treatment after exhausting the medical cover. Currently, the NHIF Regulations provide unlimited medical covers for patients suffering from chronic illnesses. |
Clause 29 Sources of funds | The sources of funds for the Emergency, Chronic and Critical Illness Fund shall be: a. monies appropriated by the National Assembly; b. gifts, grants, donations or endowments; and c. such monies from any other lawful source. | A source of funds clause specifies the origin of funds, making it clear where the money is coming from. This transparency is essential for public accountability as it allows citizens and stakeholders to understand how public funds are generated and allocated. |
PART VI – BENEFITS, TARIFFS, EMPANELMENT, CONTRACTING AND CLAIMS |
||
Clause 32 Tariffs | The benefits payable under this Act shall be based on a tariff. The Cabinet Secretary shall, in consultation with the Board, prescribe the tariffs applicable to the benefits package under this Act. The tariffs referred to under subsection (1), may be reviewed from time to time. | The tariffs set by the Cabinet Secretary should be an amount that’s affordable to the majority of Kenyans. Imposing a high tariff will prevent most Kenyans from receiving healthcare services. |
Clause 33 Empanelment | The Authority shall make payments out of the Funds to healthcare providers or healthcare facilities that are empanelled and contracted in accordance with the provisions of this Act. A healthcare provider or healthcare facility seeking to be empanelled under the Act shall make an application to the body responsible for accreditation for quality of care in the manner prescribed by the Cabinet Secretary. Upon the publication of the list of empanelled healthcare providers and healthcare facilities on the website, the Authority may contract the healthcare providers or healthcare facilities within thirty days of the date of the publication of the list. The body under subsection (2) may, at any time, revoke any accreditation under this section. A healthcare provider or healthcare facility aggrieved by the decision of the body under subsection (2) may appeal to the Dispute Resolution Committee within 30 days of the decision of the Board. | For sub-clause (2), we propose that a template of the application form is included in the Schedule of this Bill. A template provides a standard format that is easy to understand and use. Further, the use of a template enhances uniformity. |
| For sub-clause (2), we propose the addition of a prescribed period for reviewing the application form. This ensures that the application form is reviewed within a prescribed period without delays. |
||
Clause 34 Contracting | The Authority may from time to time negotiate and enter into contracts with healthcare service providers and healthcare facilities who qualify under section 33(3) for the provision of health services to the beneficiaries. The Authority shall publish on its website and in such other manner as the Authority may deem appropriate, the health service providers and healthcare facilities referred to in subsection (1) to be contracted health service providers for purposes of this Act. A publication under this section shall be subject to fulfillment by the healthcare service provider and healthcare facility of such criteria, including meeting quality standards set by the Cabinet Secretary in accordance with section 33(2). Every contracted healthcare provider and healthcare facility shall be issued with such identification as may be prescribed by the Authority and such identification shall be displayed in a conspicuous position. The Authority shall terminate the contract with any healthcare provider and healthcare facility where such healthcare provider or healthcare facility fails to meet the criteria prescribed by the Cabinet Secretary under subsection (3). Upon termination of a contract under subsection (5) the Authority shall, by notice in the Gazette, revoke the declaration made under subsection (3). Any health care provider who, or health facility which displays the identification referred to in subsection (4) without permission of the Authority commits an offence. | We propose the deletion of this clause. Healthcare service providers compete in the same market as the Social Health Insurance Fund. Therefore, using healthcare service providers to provide health services to beneficiaries creates a conflict of interest. |
Clause 35 Claims Management | There is established within the Authority an office to be known as the Claims Management Office which shall review and process the claims made under this Act. The Claims Office shall be responsible for: a. reviewing, processing and validating medical claims from healthcare providers and healthcare facilities; b. appraising medical claims based on the benefit package; c. issuing pre-authorizations for access to healthcare services based on the benefit package; d. developing an e-claims management system; e. undertaking quality assurance surveillance in respect of claims; f. establishing systems and controls for detecting and identifying fraud appropriate to the Fund’s exposure and vulnerability; g. sensitizing claimants on the consequences of submitting false and fraudulent claims; h. collecting and analyzing data for purposes of claim management; i. preparing quarterly reports on claims for submission to the to the Board and the Cabinet Secretary; and j. performing any other functions as may be necessary for the better carrying out of its functions under this Act. The Claims Management Office shall delegate the performance of its functions under subsection (1)(a), (b) and (c) to a suitable entity. The entity referred to under subsection (3) shall be a medical insurance provider or a broker licensed by the Insurance Regulatory Authority under the Insurance Act: Provided that not more than five entities shall be contracted the claims from the zones identified in the to manage manner prescribed in the Regulations. The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section. | For sub-clause (1), we propose the addition of timelines. This ensures that the Claims Office reviews and processes the medical claims within a prescribed period without delays. |
Clause 36 Settlement of claims | The Authority shall make payments to a contracted healthcare provider or healthcare facility upon submission of a claim by the Claims Management Office. The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section. | We propose the addition of timelines in this clause. This ensures that the medical claims are paid to the healthcare provider within a prescribed period without delays. |
PART VII – FINANCIAL PROVISIONS |
||
Clause 38 Investment of funds | All monies in the Authority which are not immediately required to be applied for the purposes of this Act shall be invested: a. in such investment in a reputable bank on the advice of the Central Bank of Kenya, being an investment in which trust funds, or part thereof authorized by law to be invested; and b. in government securities as may be approved by the National Treasury. All investments made under this section shall be held in the name of the Authority. | Investing funds can generate income for the Authority. This additional income can support operations of the Authority or be reinvested for growth. |
Clause 39 Retention of receipts and earnings | All receipts, earnings and accruals to the Authority and the balance of the Funds at the close of each financial year shall be retained by the Authority for the purposes of the Funds. | We propose the addition of a prescribed period for retaining the documents before they are disposed of by way of recycling. We prefer recycling as a method of record disposal as it’s environmentally friendly and ensures compliance with Article 42 of the Constitution. |
Clause 40 Annual estimates | The Authority shall, within three months after the end of the financial year, cause to be prepared estimates of its revenue and expenditure for that financial year. The annual estimates shall make provision for all estimated expenditure of the Authority for the financial year concerned, and in particular shall provide for: a. the payment of all the claims and benefits of the contributors in respect of medical and healthcare expenses incurred by them or their named beneficiaries pursuant to the provisions of this Act; b. the payment of salaries, allowances and other charges in respect of the staff of the Authority; c. the payment of pensions, gratuities and other charges in respect of retirement benefits which payable out of the funds of theAuthority; d. the proper maintenance of buildings and grounds of the Authority; e. the acquisition, maintenance, repair and replacement of the equipment and other movable property of the Authority; or f. the creation of such reserve funds to meet future contingent liabilities in respect of retirement benefits, insurance or replacement of buildings equipment, or in respect of such other matters as the Authority may consider appropriate. The annual estimates shall be approved by the Board before the commencement of the financial year to which they relate and after the approval, the annual estimates shall not be increased without prior consent of the Board. No expenditure shall be incurred for the purposes of the Authority except in accordance with the annual estimates approved under subsection (3) or in pursuance of an authorization of the Board. | Annual estimates determine how much money is allocated to the Authority by the National Assembly before the commencement of each financial year. |
Clause 41 Expenses of administering the Funds | There shall be paid out of the finances of the Authority such administrative expenses as may be incurred by the Board in the exercise of its powers or the performance of its functions under this Act. The administrative expenses referred to under subsection (1) shall not exceed five percent of the annual expenditure of the Fund: Provided that the administrative expenses shall not at any time exceed the cost of benefits payable under this Act. | Setting a cap on administrative expenses ensures cost control within the Authority. By limiting the percentage of benefits that can be used for administrative purposes, the Authority can prevent excessive spending. This ensures that the Authority is financially stable. Secondly, a limit on administrative expenses encourages efficient allocation of resources. The Authority will be incentivized to invest in technologies and processes that streamline administrative tasks and reduce overhead costs while maintaining service quality. |
Clause 42 Accounts and audit | The Board shall cause to be kept all proper books and records of accounts of the income, expenditure, assets and liabilities of the Authority. Within three months after the end of each financial year, the Board shall submit to the Auditor-General, the accounts of the Authority together with: a. a statement of income and expenditure of the Authority during the year; and b. statement of the assets and liabilities of the Authority on the last day of that year. The accounts of the Authority shall be audited and reported upon in accordance with the provisions of the Public Finance Management Act and the Public Audit Act. | This clause ensures that monies spent and raised by the Board can be tracked and easily accounted for. |
PART VIII – DISPUTE RESOLUTION COMMITTEE |
||
Clause 44 Dispute resolution | A person aggrieved by a decision made under this Act may, within one month from the date of the decision, appeal to the Dispute Resolution Committee for a review of such decision. The Committee may uphold, reverse, revoke or vary the decision of the Board appealed under subsection (1). | We propose that the Committee is given power to refer a dispute to Alternative Dispute Resolution (“ADR”). This proposal will be consistent with Article 159 (2) (c) of the Constitution. ADR is typically faster than litigation. Resolving disputes through ADR can result in quicker resolutions, which allows parties to move forward with their lives. Secondly, ADR methods are flexible and can be customized to suit the specific needs of the parties involved. The process can be adapted to the complexity of the dispute and the preferences of the disputing parties, allowing for more creative solutions. |
The clause is silent on whether the decision of the Committee is final. We propose that a person dissatisfied with the Committee’s decision may appeal to the High Court with its decision being final and binding on the parties. Incorporating this change ensures there is an end to the litigation process. |
||
We propose the addition of timelines in this clause. This ensures that the Committee hears and determines the dispute within a prescribed period without delays. |
||
Clause 45 Establishment of a Dispute Resolution Committee | There is established a Committee to be known as the Dispute Resolution Committee for the purpose of hearing and determining complaints, disputes and appeals in accordance with this Act or any other written law. The Committee shall consist of: a. a Chairperson who shall be appointed by the Cabinet Secretary from among persons qualified to be judges of the High Court; and b. four other persons who shall be appointed by the Cabinet Secretary and shall possess knowledge and experience in health, health economics, business administration, insurance and who are not in the employment of the Government or the Board and are not health service providers. The members of the Committee shall hold office for a period of three years and shall be eligible for reappointment for one further term of three years. The quorum for a meeting of the Committee shall be the Chairperson and two other members. The members of the Committee shall be entitled to receive such allowances as the Cabinet Secretary in consultation with the Salaries and Remuneration Commission, may determine. The Cabinet Secretary shall prescribe procedures for the operationalization of the Committee. | For sub-clause (1), we propose that members of the Committee are appointed through a fair, transparent and competitive process. A fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Committee. Secondly, this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. |
Sub-clause (2) is a good proposal as the Committee has an odd number of members. When there’s an even number of members who can vote, there’s a greater risk of deadlocks. This makes it difficult for the Committee to make decisions, resolve conflicts, or move forward with its agenda. An odd number ensures that there will always be a majority decision. |
||
Sub-clause (5) is a good addition. This proposal will be in line with Article 230 (4) (a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
||
Clause 46 Vacancy in the Dispute Resolution Committee | The office of a member of the Committee shall become vacant if the member: a. dies; b. resigns; c. is unfit by reason of mental or physical infirmity to perform the duties of his office; d. is convicted of an offence and is sentenced to a term of imprisonment for a period of six months or more; e. has failed to attend at least three meetings of the Committee; or f. is removed from office on any of the following grounds: I. gross violation of the Constitution or any other written law; or II. gross misconduct or misbehaviour. | We propose the addition of timelines in this clause. This ensures that the vacant positions are filled within a prescribed period without delays. Further, this proposal ensures that the Committee has the required quorum to effectively perform its functions. |
PART IX – MISCELLANEOUS PROVISIONS |
||
Clause 47 Stakeholder engagement | The Authority shall facilitate public participation and stakeholder engagement in the carrying out of its functions under this Act. The Cabinet Secretary shall prescribe regulations on the modalities of engaging stakeholder sat at the national and county level. | This is a good proposal as it ensures compliance with Article 118 of the Constitution. |
Clause 48 Digitization | All processes and services under this Act shall be digitized using appropriate, reliable, secure, interoperable, verifiable and responsive technology through an information system developed pursuant to the relevant written law. The processes subsection (1) shall include: a. registration of members; b. member identification; c. contributions to the Fund; d. empanelment of facilities; e. execution of contracts; f. member identification; g. notification and preauthorization; h. claims management; and i. settlement of claims. Every Kenyan shall be uniquely identified for purposes of provision of health services under this Act. The digitization of processes and services under this Act shall conform to the provisions of the Data Protection Act 2019 and all other relevant laws. The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section. | Digitization automates repetitive tasks, reduces manual paperwork and streamlines processes. This efficiency leads to faster service delivery, reduced processing times and increased productivity. Secondly, digitization reduces operational costs associated with printing, storage and manual processing. It also minimizes the need for physical infrastructure, leading to significant cost savings in the long run. Thirdly, digitization encourages innovation by fostering the development of new services and technologies. Organizations can experiment with emerging technologies like artificial intelligence to enhance service delivery. |
Clause 49 Offences and penalties | Any person who: a. fails without lawful excuse to pay to the Social Health Insurance Fund within the period prescribed by this Act any contribution which he or she is liable as a contributing employer to pay under this Act; b. knowingly makes any deduction from the wages of the employee in respect of any contribution which he or she is liable as a contributing employer to pay under this Act, other than a deduction which he or she is authorized to make by this Act; or c. for the purpose of obtaining any benefit for himself or herself or for any other person, knowingly makes any false statement or representation, or produces or furnishes, or causes to be produced or furnished, any document or information which he or she knows to be false in any material particular, commits an offence and shall be liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding three years, or to both. A person who misappropriates any of the funds or assets of the Fund or assists or causes any person to misappropriate or apply funds, otherwise than in the manner provided in the Act, commits an offence and shall upon conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million shillings or to both. Any person who, for the purpose of obtaining the payment of any benefit under this Act, knowingly makes any false statement, whether orally or in writing, commits an offence and is liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding sixty months, or to both. Any person who with intent to obtain the payment of any benefit under this Act, impersonates any person whether living or dead, commits an offence and is liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding three years, or to both. A health care provider or health facility which knowingly or fraudulently alters or falsifies any information with intent to defraud the Authority or to obtain any benefit that it is not entitled to under this Act, commits an offence and is liable on conviction to: a. fine not exceeding five hundred thousand shillings; b. suspension; or c. removal from the register of empaneled and contracted health care providers. The Authority shall cause the name of every health care provider or health facility suspended under subsection (5) (b) to be notified in the Gazette and such institution shall not, during the suspension, be entitled to any benefit from the Fund. The Board shall cause the name of every healthcare provider or health facility removed from the register under subsection (5)(c) to be notified in the Gazette, at least two newspapers of national circulation and at the official website of the Authority. A healthcare provider or health facility which has been removed from the register under subsection (5) (c) shall not be entitled to receive any benefit from the Authority. | This clause acts as a deterrence in ensuring that a person complies with the provisions of this Bill. |
Clause 52 Application of Cap. 487 | The provisions of the Insurance Act shall apply to the Authority only in respect to risk spreading and claims administration services. | This clause seeks to align the Bill to be consistent with the Insurance Act Cap. 487 in matters relating to risk spreading and administrative services claims. |
Clause 53 General penalty | A person convicted of an offence under this Act for which no other penalty is prescribed shall be liable to a fine not exceeding one million shillings or, in the case of a natural person, to imprisonment for a term not exceeding two years, or to both. | A general penalty clause acts as a deterrent in discouraging individuals from engaging in activities that violate the Bill. The potential for a penalty provides a strong incentive for compliance with the Bill’s provisions. |
Clause 54 Repeal of No. 9 of 1998 | The NHIF act is repealed. | The Bill repeals the NHIF Act as it seeks to provide Universal Health Coverage through the Bill to most Kenyans. |
Clause 55 Winding up | In the event of winding up of any of the Funds established under this Act, the cash balances shall be transferred to the Exchequer while other assets shall be transferred to the National Treasury. | We propose the deletion of this clause and replacing it with the following: “On the winding up of any of the Funds: a. the administrator of the Funds shall pay any amount remaining in the Funds into the National Exchequer Account for the credit of the national government; or b. the Cabinet Secretary shall pay any deficit in the Funds from funds of the national government in the National Exchequer Account with the approval of the National Assembly; and c. the Cabinet Secretary shall submit a final statement of accounts to Parliament.” This proposal seeks to align the Bill with the provisions of section 24 (9) of the Public Finance Management Act. |