President William Ruto’s cabinet on Tuesday approved the scrapping of the National Hospital Insurance Fund (NHIF) and instead be replaced by three independent funds.

According to a cabinet dispatch, NHIF will be replaced by the Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic and Critical Illness Fund.

In that regard, the cabinet meeting chaired by the President okayed four Bills that will see NHIF abolished and replaced in a bid to attain Universal Health Coverage (UHC) in Kenya.

The intention of UHC is to allow all people in Kenya to have access to the healthcare services they require, when and where they require them, without any financial constraints.

“These Bills usher in a paradigm in the legal and institutional framework for healthcare in Kenya by repealing the current National Health Insurance Fund and establishing in its place the following funds: Primary Healthcare Fund; Social Health Insurance Fund; and Emergency, Chronic and Critical Illness Fund,” said the Cabinet dispatch.

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The Primary Health Care Bill 2023, Digital Health Bill 2023, Facility Improvement Financing Bill 2023, and Social Health Insurance Bill 2023 will be tabled in Parliament for consideration.

According to the dispatch, the Digital Health Bill will allow for the formulation of standards to govern the provision of m-health, telemedicine and e-learning in healthcare provision.

“This new architecture is expected to provide a framework for improved health outcomes and financial protection of families in fidelity to the State’s solemn duty to guarantee the health and welfare of all her citizens,” added the dispatch.

The crucial Cabinet meeting was held at the Kakamega State Lodge.

NHIF is a State Corporation established in 1966 with a chief mandate of providing medical insurance cover to all its members and all their dependants, as declared during registration.

The original Act of Parliament that established the Fund has been reviewed over the years to incorporate changing healthcare needs of Kenyans and restructuring in the health sector.

The NHIF Act (1998) was amended and passed in the National Assembly on December 21, 2021 and assented into law on January 10, 2022 by immediate former President Uhuru Kenyatta.

In May, Ruto announced proposed changes that would see current NHIF rates of between Sh150 and Sh1,700 per month replaced with a flat rate of 2.7 per cent of one’s gross salary.

In the fiscal year ended June 2022, NHIF collected Sh78.84 billion in premiums against a Sh90.57 billion target as dormant members rose to 8.8 million from 5.03 million in 2021.

NHIF also registered 1.34 million new members from the informal sector raising the total to 10.64 million and 175,651 from the formal sector increasing membership to 4.82 million.