Kenyans to pay Sh543 billion for universal health plan

By Gatonye Gathura

Kenyans will cough up to Sh543 billion in the next five years towards the Universal Health Care plan.

More than half of the money about Sh268 billion will be collected from an estimated 12 million workers in the informal sector in a scheme that may soon become mandatory.

Almost half of the money will go into paying for medicines through the current distribution system that has already raised global concerns. (see separate story)

A road map document for Universal Health Coverage in Kenya shows by 2022 the scheme will have fully covered 51 million people – the estimates national population by then.

For the formal sector the contributions will not change much from the about Sh31 billion this year to Sh36 billion in 2022.

This also indicates the government has not factored any significant growth in the formal sector during the five year period despite manufacturing being a key pillar in the Big Five.

The pressure will largely lie on the informal sector where the government plans to raise Sh73 billion in 2022 from about 12 million contributors.

This is up from Sh28 billion expected to be raised from 4.7 million informal contributors to the scheme in 2018. Last year there were about three million contributors from the informal sector.

The UHC roadmap currently circulating among health sector stakeholders is being prepared under Dr Nancy Mucogo Njeru of the ministry’s Department of Policy, Planning & Health Care Financing.

The stakeholders are also toying with the idea of making the contributory scheme mandatory for every Kenyan so as to make it ‘predictable and sustainable.’

“By 2022, a 100 per cent of Kenyans will be covered by a mandatory social health insurance,” says the document

Kenyans will also be financing a subsidy scheme for about seven million people comprising of 1.79 elderly (over 70) and disabled, 1.5 million poor households, 1.3 million pregnant women and three million secondary school children.

Collectively the subsidy programme will cost Sh102 billion for the five years. Currently the subsidy scheme has only Sh6.5 billion at hand hence a staggering deficit of Sh95.5 billion.

“This available Sh6.5 billion is a one off allocation by government and development partners,” says the Roadmap.

Currently the subsidy programme is being sustained through loans, grants and donations from the World Bank, Rockefeller Foundation, the UK and the Norwegian governments.

Others are Bill and Melinda Gates Foundation, the German Development Corporation (GIZ) through KfW Development Bank and the Japanese Government.

The roadmap document however, lacks details on how the deficit will be financed promising that such are still being worked out.

In broad strokes, the roadmap suggests the government will attract $2 billion from the private sector, increase the health budget from seven per cent to 10 per cent and introduce alternative financing.

The document says the government with ‘utilize budgetary resources’ to finance the health care plan.

This may be the first official indication for Kenyans to prepare for higher targeted taxation in financing health.

At a national heath forum organized by the ministry in Nairobi in March delegates were assured that a comprehensive universal health financing strategy was been finalized and would soon be published.

However it emerged at the meeting held at the Laico Regency, Nairobi some of the fund raising strategies on the table include raising of consumption taxes such as on sugar, tobacco, alcohol and mobile money.

For instance, Treasury will dedicate a third of all excise taxes it receives from tobacco sales towards funding the healthcare programme.

Last year, it collected about Sh12.2 billion from excise taxes on cigarettes, and this means at least Sh3.6 billion will be netted.

Alcohol earns the taxman in excess of Sh25 billion with plans to have 15 per cent of this amount funding health programs directly.

Gamblers will also see 15 per cent of taxes they generate go towards healthcare. A similar percentage of excise taxes will be collected from the sales of jewelry, cosmetics and locally assembled cars.

The health sector, possibly aware of the huge amounts of money coming their way has assured Kenyans of more accountability and transparency.

In a joint communiqué signed after the March Health Sector Forum delegates including the Cabinet Secretary for Health Sicily Kariuki promised more accountability.

“We will promote good governance, inclusiveness, transparency, flexibility, accountability and integrity in the health sector,” says the communiqué.

But although the political arm of the government has announced to soon start piloting UHC in Kisumu, Isiolo, Nyeri and Machakos counties the roadmap indicates a lot of paper work is still to be done.

This, the bureaucrats says include, hospital grading and accreditation, patient benefits package health infrastructure strengthening and legal policies.

The road map says the current number of health workers will be doubled and their skills upgraded to provide more and better quality services.

www.rocketscience.co.ke

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