Kenya’s Ministry of Health has said a loan mechanism will be used to enlist Kenyans working in the informal sector to make contributions to the Social Health Insurance Fund (SHIF). President William Ruto had promised the gov’t would cover SHIF contributions for hustlers. Why Ruto’s gov’t insists on mandatory SHIF contributions The ministry told the Court of Appeal that they (hustlers) can access the funds needed for contributions and make interest-bearing payments later.
In 2023, judges David Manjanja, Christine Meoli, and Lawrence Mugambi of the High Court ruled that the payments were illegal, citing discrimination by the government against people working in the formal sector who make mandatory contributions. According to the judges, the Kenya Kwanza Alliance administration had designated employed individuals as “low-hanging fruit” for the new health scheme. Ministry of Health insists no “free riders” However, the ministry maintained that there are no “free riders” in its submissions. It clarified that the government would cover expenses for children and the poor. The ministry insisted that hustlers in the informal sector must pay for SHIF or take a government loan to make contributions.
“The High Court acknowledged the appellant’s contention that to achieve membership by all persons, some sanction and or compulsion was necessary that the ‘free riders’ in the informal sector can be heralded to the Social Health Insurance Fund even when not in dire need of life-saving treatment,” the ministry stated, as reported by The Standard. The ministry reiterated that the High Court recognised that the National Health Insurance Fund (NHIF), the precursor to SHIF, was unsustainable because individuals in the formal sector contributed 83% of NHIF and received 69% of the benefits, while those in the informal sector received 227%. It added that only 13% of the population carried the heavy burden of the contributions to the new scheme.
“Health CS Deborah Barasa emphasized the need for innovative health financing mechanisms, including SHIF and the Emergency, Chronic, and Critical Illness Fund (ECCIF), to address funding gaps and sustain healthcare services,” the ministry stated. Health CS Deborah Barasa speaks during the 2025 health summit in Nairobi. Why did govt transition from NHIF to SHIF? The government rolled out the registration of Kenyans for the SHIF membership in July 2024. President William Ruto said the programme will cover all kinds of diseases, including cancer, blood sugar, and hypertension, among others. He had assured that no Kenyan would be required to pay for services once the Universal Health Coverage (UHC) was rolled out. He said SHIF aims to revolutionise Kenya’s healthcare system by ensuring equity and comprehensive coverage for all citizens, including those previously left out by NHIF.
by Japhet Ruto
