A legal complaint has been made in court opposing the recent introduction of the Social Health Insurance Act.
The person who filed this complaint, Dominic Oreo, believes that the mandatory 2.75 percent deduction from employees’ salaries is too much for Kenyans, who are already dealing with various taxes and reductions.
Oreo argues that the new law is unclear and lacks an effective way to identify its members.
He states that, “This means that testing is error-prone, with some undeserving individuals being classified as poor, while some deserving poor are excluded,”
Additionally, he raises concerns about how this health scheme will be funded through premium contributions, which are not a dependable source of income, especially in a country with widespread poverty.
Oreo also points out that the law does not explain how revenue will be collected from the informal job sector in a practical way.
He further argues that failing to transfer NHIF (National Hospital Insurance Fund) employees to the new fund is discriminatory and could result in job losses.
Oreo suggests that the law doesn’t clarify the roles of county governments and how it might affect these local governments.
He urges the court to cancel this law.
This legal challenge comes after President William Ruto signed four Universal Health Coverage (UHC) bills into law.
These bills include the Primary Health Care Bill, Facility Improvement Financing Bill, Digital Health Bill, and the Social Health Insurance Bill.
This means that Kenyan employees in formal jobs will now contribute 2.75 percent of their salary, with a minimum of Ksh.300 and a maximum of Ksh.5,000.
President Ruto, speaking during the 60th Mashujaa Day celebrations in Kericho County, defended this decision.
He explained that the new system is designed to make healthcare accessible to every Kenyan based on their income.
“Previously, an individual earning Ksh.10,000 had to part with Ksh.500 to NHIF, a hefty 5% of their earnings.
On the other hand, those with salaries of Ksh.100,000 or more contributed Ksh.1,700, a mere 1.7% of their income.
Astonishingly, even someone with a monthly income of Ksh.1 million, paid the same amount,” said President Ruto.
“This bizarre setup meant that low-income earners were effectively subsidizing high-income earners.
The Social Health Insurance Fund also signifies a shift to increased use of domestic resources for health financing and a sustainable approach, especially at a time when resources from donors and development partners are dwindling.”
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