OPINION
Kenya set out to end a long domestic quarrel by replacing a battered national insurer with a single universal fund. The Social Health Insurance Fund (SHIF), administered by the new Social Health Authority (SHA), was meant to sweep away decades of unpaid bills, patchy coverage and households bankrupted by medical costs. One year in, the promise looks fragile. At hospital doors, patients complain of confusion. Providers report delayed payments. Fraud and mismanagement, the very ghosts the reform was supposed to banish, have re-emerged. These are not teething problems. They go to the heart of whether universal health coverage can command public trust.
The reform’s architecture had merit. A flat levy was replaced with a 2.75 per cent income-based contribution. Three dedicated funding streams were created. A digital-first enrolment and claims system was designed to speed payments and stem leakages. In theory, these choices aligned Kenya with global best practice. In practice, they collided with the realities of an economy where four in five workers toil in the informal sector, incomes rise and fall unpredictably and means-testing is hard to administer fairly. The minimum monthly contribution of KSh 300 (US$ 2.30) has proved onerous for hawkers, boda boda riders and small traders. The result is patchy enrolment, weak compliance and growing suspicion that SHIF merely repackages the old NHIF.
The governance gap
Governance is the weakest link. Allegations of fraud and political capture that dogged the old scheme persist. In 2024, authorities rejected KSh 10.6 billion in suspect claims, some linked to “ghost clinics”. Procurement disputes over a KSh 104 billion digital contract have deepened public scepticism. Counties, which constitutionally shoulder frontline health delivery, remain unclear about their role under SHA, creating duplication and delay. Professional bodies complain of being sidelined in reform design, fuelling resistance.
Digitalisation illustrates both the promise and peril of the new approach. Biometric verification and national health records could eventually make fraud harder and claims smoother. Yet many Kenyans, especially the elderly, those in informal settlements and users of basic phones, struggle with systems designed for smartphones and fast internet. Rural clinics often lack connectivity or trained staff. The result is more manual workarounds, errors and the opacity digitisation was meant to cure.
Affordability and the informal majority
Affordability is another fault line. While payroll deductions work in the formal economy, they barely touch the informal sector. Irregular incomes and inadequate subsidies leave millions exposed. The scrapping of Linda Mama, the free maternal-care programme, has forced expectant mothers back into out-of-pocket spending. For families battling chronic disease, co-payments endure. Far from easing financial pain, SHIF risks entrenching it.
Elsewhere in Africa, more promising models exist. Rwanda’s Mutuelles de Santé, anchored in local social structures and stratified by socioeconomic status, covers more than 90 per cent of citizens. The poorest are fully subsidised, communities drive enrolment and oversight is robust.
Lessons from abroad
Ghana broadens its financing base through a dedicated VAT levy. Nigeria uses federal revenue transfers to guarantee primary care for the poor. Thailand, facing a fragmented labour market not unlike Kenya’s, rolled out its universal coverage scheme in phases, starting with high-capacity regions before scaling nationally.
The lessons are clear. Governance must be made credible, beginning with an independent oversight council empowered to audit, publish results and sanction wrongdoing. Financing must be more progressive and diversified, with earmarked taxes on harmful products and broader subsidies ensuring the poorest are covered. Digital systems must be inclusive, combining biometric platforms with USSD codes and paper-to-digital workflows to reach those without smartphones. Implementation should proceed in phases, piloted in stronger counties before nationwide rollout. Providers must be treated as partners, with prompt reimbursements and transparent contracts to secure their cooperation.
At stake is not just a technical fix but a social contract. If citizens see contributions deducted but hospitals unpaid, they will treat SHIF as a tax without benefit. Trust, once lost, will be hard to win back. Yet Kenya still has time to steer its health reform back on course. Transparent data dashboards, phased pilots, restored maternal health coverage and visible accountability could rebuild confidence.
The alternative is bleak. A system that leaves the poorest uninsured, the private sector wary and the public sceptical will entrench inequality rather than reduce it. For Kenya, a nation that has styled itself a regional leader in health reform, the next two years will decide whether SHIF becomes a continental model of universal coverage or a cautionary tale.
Written by Philip Mwangangi
