Why Ruto government wants court to lift SHIF freeze order

President William Ruto's administration is pushing for the lifting of a court order that froze the implementation of the Social Health Insurance Act, 2023, arguing that the blockade has created a vacuum in the health sector.

In an application pending before the Court of Appeal, Health Cabinet Secretary Susan Nakhumicha has argued for the suspension to be lifted, saying the vacuum has affected more than 17 million Kenyans who rely on the defunct National Health Insurance Fund (NHIF) for treatment.

The Kenya Kwanza administration has expressed frustration at court orders blocking the implementation of its key projects, including the Social Health Insurance Fund (SHIF) and housing levy, which have been frozen by court injunctions.

“The applicant is aggrieved by the order and seeks to lodge an appeal before this honourable court to set aside the said orders so as to seal the legal vacuum and afford millions of Kenyans access to healthcare,” Ms Wafula said in the application.

The NHIF Act was repealed on November 22, 2023, after the enactment of the Social Health Insurance Act, 2023.

Parliament passed the Social Health Insurance Act, 2023, the Primary Health Care Act, 2023 and the Digital Health Act to replace the 57-year-old NHIF, but implementation was halted five days after Ms Wafula gazetted the new legislation.

Affordable healthcare

The government is implementing the Universal Health Coverage (UHC) programme to provide quality and affordable healthcare to all Kenyans.

During the signing of the Bill, President Ruto said the Primary Healthcare Fund will purchase services from health facilities at levels 1 to 3, while the Social Health Insurance Fund will cover services at levels 4 to 6.

Dr Ruto further explained that the Emergency, Chronic and Critical Illness Fund will take care of emergency and chronic illness costs once the social health insurance is exhausted.

Through Senior Counsel Fred Ngatia, Ms Wafula applied to the court on December 8 to have the order set aside on the grounds that it was affecting access to healthcare for NHIF members, but the application was dismissed.

The CS said there were more than 5 million members of the defunct NHIF who were currently receiving in-patient treatment in various hospitals for emergency and critical illnesses and were unable to obtain prior authorisation for any additional treatment or related services due to the fact that both the NHIF and its successor were defunct.

“Over 100,000 Community Health Promoters who had been appointed and entrenched in the Primary Health Care Act to provide support to preventive health care services at the grass-roots can no longer perform the functions due to the suspension of the Act,” she said.

Mr Ngatia said the court failed to consider the impact of the stay on the Social Insurance Health Act and members who use the NHIF to access health services.

The High Court halted the government's plan to introduce the SHIF after an application by Joseph Enock Aura complained that it was illegal for the government to deny services to Kenyans unless they were registered with the fund.

The law makes it mandatory for all Kenyans to be members of a new fund in order to benefit from other government services.

Accessing public services

Section 26(5) of the Social Health Insurance Fund Act provides that, “Any person who is registerable as a member under this Act shall produce proof of compliance with the provisions of this Act on registration and contribution as a precondition of dealing with or accessing public services from the national government, county government or national or county government entities”.

Mr Aura further argued that the digitisation and storage of children's biometric data (without their consent) would be a breach and violation of their right to privacy and would expose them to greater risks of online invasion, trade and attrition of their personal digitised information without their consent.

He argues that services provided by the national and county governments will be inaccessible to anyone not digitally registered under the new fund.

“Even when so registered, where such person remains not up-to-date in remittance of such prescribed dues under this Act, they will nevertheless be automatically barred and stand barricaded from accessing any, and any such governmental services, thereby creating a constitutionally-barred class of differentiated and destitute underdogs,” he said in an affidavit.

His lawyer, Harrison Kinyanjui, said the direct implication of the SHIF's mandate is to "irrationally, summarily and unreasonably" restrict Kenyans' access to government services, thereby denying their right to life.

He said the said section was unconstitutionally created by the Executive in the final publication of the Act as Parliament had intended to block the said provision at the committee stage.

Mr Aura further states that the Act is also unlawful in stating that every Kenyan must be digitised as a matter of priority using unique biometric data in order to be recognised as legally compliant with the provisions of the Digital Health Act.

He pointed out that section 47(3) of the SHIF Act states in mandatory terms that, “Every Kenyan shall be uniquely identified for purposes of provision of health services under this Act.”

Multiple taxation

Further, he pointed out that section 27(1)(a) of the Social Health Insurance Fund Act, 2023 imposes the obligation on every Kenyan household to remit dues, which he says is a form of multiple taxation.

Mr Aura said in sum, no Kenyan will receive any class of health services unless they have a unique biometric identification.

Another petitioner, Mr Dominic Oreo, also challenged the new fund, arguing that the failure to transfer all NHIF employees to the newly established funds was discriminatory, amounted to unfair labour practices and violated the Constitution.

Mr Oreo says the law does not specify a process for defining the health services covered by the scheme.

"The lack of a systematic, evidence-based approach for designing an affordable and cost-effective benefits package reaffirms the petitioner’s assertion that the Act is half-baked," he said.

Mr Oreo also says the law imposes a mandatory contribution of 2.75 per cent on employees, which is excessive for Kenyans who are already burdened with taxes and deductions.

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