Government roadmap outlines plans to raise Sh543b for universal health

[Photo: Courtesy]

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

Of this, 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 below)

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

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

Key pillar

This means 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 of Health’s Department of Policy, Planning and Health Care Financing.

The stakeholders are also toying with the idea of making the contributory scheme mandatory for every Kenyan to make it “predictable and sustainable”.

“By 2022, 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 million elderly (aged above 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.

The subsidy programme is currently sustained through loans, grants and donations from the World Bank, Rockefeller Foundation as well as the UK and Norwegian governments.

Worked out

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 Sh200 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 will “utilise 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 organised by the ministry in Nairobi in March, delegates were assured that a comprehensive universal health financing strategy was being finalised and would soon be published.

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

Good governance

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 programmes directly.

Fifteen per cent of taxes generated from gambling will go towards healthcare. A similar percentage of excise taxes will be collected from the sale 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, Cabinet Secretary 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 say, 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.