One of Kenya’s most far-reaching social policy reforms has weathered a significant constitutional challenge, with the High Court affirming the legality of the Social Health Insurance Fund (SHIF) despite sharply criticising its implementation.
In his ruling, Bahati Mwamuye upheld the legality of the KSh 104.8 billion digital health contract tied to SHIF and confirmed the government’s mandate to replace the former NHIF system. However, he found that the rollout breached constitutional rights, as thousands of patients struggled to access critical healthcare services during the transition, noting the state moved faster than its systems could support.
By the time the matter reached court, millions of Kenyans had already been enrolled under SHIF, with the NHIF effectively phased out.
The judge observed that, in the early stages, many citizens were unable to obtain essential and life-saving care, framing the issue not as a mere administrative lapse but as a failure of the state’s constitutional obligations.
The petition, filed by Okiya Omtatah, argued that the government rushed the shift, relied on inadequately approved regulations, and introduced a complex funding structure before establishing the necessary infrastructure.
At the centre of the dispute was a KSh 104.8 billion contract awarded by the Ministry of Health to a consortium led by Safaricom to develop the Integrated Health Information Technology System, the digital backbone intended to manage registration, contributions, and claims nationwide.
Critics maintained that the procurement process sidestepped competitive bidding, leaned on a contentious “special procurement” clause, and expanded significantly during negotiations. They also questioned the wisdom of launching universal health insurance on an untested digital platform.
The government, on the other hand, argued the project was too urgent and complex for conventional procurement, warning that halting it would destabilise healthcare financing for millions already transitioned to the new system.
The court ultimately upheld the constitutionality of the Social Health Insurance Act, affirming the government’s authority to establish the new framework and issue operational regulations. It also dismissed claims of procedural mishandling by Parliament and the Senate.
On procurement, the ruling validated the use of the special mechanism to award the contract, finding that the Ministry acted within the law. While acknowledging procedural weaknesses, the court held they were insufficient to nullify the deal.
Scrapping the system, the court noted, would have left Kenya without a functional national health insurance framework and disrupted payments to healthcare providers already adapting to the new model.
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Instead, the government has been directed to address the shortcomings, safeguard patients during the transition, and report back within 90 days on measures taken to stabilise the system.
Currently, the Social Health Authority (SHA) reports about 24.7 million registrations, though that figure is under scrutiny amid audits and parliamentary probes questioning how many enrollees are actively contributing.
Further concerns have emerged over alleged losses running into billions through fraudulent claims, ghost facilities, and undocumented payments, casting doubt on whether the costly digital overhaul will succeed in curbing inefficiencies that plagued the now-defunct NHIF.
