Health tax: What awaits men with several spouses

A section of stakeholders in the health sector have raised concerns over the criterion to be used by the government to determine the amount of money that unemployed people would contribute to the Social Health Insurance Fund (SHIF).

Under Section 27, sub-section 2 (b) of the Social Health Act Regulations, the government says it would use means testing instrument, which it is yet to formulate, to determine the monthly amount of money to be paid by non-salaried persons, an issue that has raised concerns among experts and stakeholders.

This sort of arrangement, it is being argued, would lead to disparities in payments among individuals. For example, people living within a certain neighbourhood, doing similar jobs and leading same lifestyles may find themselves paying different premiums.

Experts now warn that this could create disenchantment among hustlers, the very people that SHIF had targeted to benefit.

In some instances, a villager with dozens of cattle, particularly among the pastoralists, could be determined by the means testing instrument to be capable and therefore categorised as among those to pay a higher premiums.

Queries have emerged over the description of the household in the regulations following revelations that this would lead into a situation where in the case of a polygamous family, a contributor would pay for each individual spouse.

The regulations stipulate that a contributor in a household is supposed to pay for each individual spouse, in a situation where a contributor has more than one spouse. Those with five wives, will pay for each of them.

This will also apply to unemployed children above 25 years but still staying with their parents, who would be treated as different households and required to pay Sh300 monthly.

“A person who has attained the age of twenty-five years and has no income of his or her own or is living with the contributor shall be treated as a household separate from the contributor and shall pay Kenya shillings three hundred (Sh300) per month,” Section 20 of the regulations says.

Some stakeholders and experts are of the view that a man with more than one wife should be treated as one household, the same way it has been under the National Health Insurance Fund (NHIF).

Means testing

Seme MP James Nyikal, a one time Director of Medical Services, says the definition of household in the SHIF Act is very vague, leaves loopholes for abuse and it does not recognise polygamy.

“As it is, a man with three wives, whom he takes care of as the breadwinner will end up paying for each spouse separately. The regulations must be changed to recognise polygamy as an African practice,” Nyikal observed.

But the most contentious issue is the means testing aspect, which some stakeholders claim that in a country that is deeply entrenched in economic inequality, is tantamount to targeting the poorest in the society.

“In the case of a household whose income is not derived from salaried employment, by an annual contribution of a proportion of household income as determined by the means testing instrument in the manner prescribed under this Act,” Section 27 sub-section 2 b of the regulations states.

Sub section 2c further states: “In the case of households in need of financial assistance as determined by the means testing instrument, by the government at a rate apportioned from funds appropriated by Parliament and County Assemblies for that purpose as prescribed under this Act.”

The government would use social economic elements such as housing characteristics , access to basic services and household composition in the means testing formula.

According to Dr Brian Lishenga, the chairman of the Rural Private Hospitals Association (Rupha), and John Gikonyo, President of Renal Patients Society of Kenya, the means testing exercise is not only going to be an expensive undertaking that would consume a considerable amount of money, but would is also cumbersome.

“Means testing is going to encourage families to provide false information in order to benefit from the government scheme. It would also lead to widespread bribery by families to the enumerators to be considered in the category of the vulnerable,” Dr Lishenga observes.

Heavy investment

Based on the 2019 national population census, there are about 12.6 million households in Kenya, with each household consisting of four members each.

“Does the country have the capacity to employ people within this short period to move around the country undertaking means testing on the about 13 million households?” Dr Lishenga observed.

To undertake such an enormous exercise, experts warned, the government would have to invest heavily in human resources and equipment.

With only three months until July when remittances to the SHIF are scheduled to begin, the government is yet to release the mechanisms through which it would undertake the means testing exercise and its budget.

To avoid the administrative costs and logistics problems that would come with the means testing system, some experts suggest that the government use the general taxation means, but with a caveat that the funds collected are ring-fenced to be used for the particular purpose.

“The taxation system can be in the form of the road maintenance levy imposed on fuel. This would avoid the complications that are likely to be brought about by the means testing system,” Dr Lishenga says.

Flow of funds

This, it is said, would widen the tax bracket by bringing everyone on board while ensuring that all contributors make the same payments for similar services.

“How sure are we that the government will generate accurate information through means testing? Wouldn’t it be misleading for example for some official to use the number of chairs one has in his house to determine the amount of money one should pay?

And will Kenyans provide accurate information knowing very well that it would be used to determine what to pay? says Gikonyo.

Questions are also emerging over how the government would ensure a consistent flow of funds to run the Emergency, Chronic and Critical Illnesses Fund and the Primary Healthcare Fund as the SHI Act stipulates that their finances would be appropriated by Parliament.

“We have seen what has been happening with the Constituency Development Fund where MPs blackmail the government to release the money. There are also several instances where the National Treasury delays to release the money. How sure are we that this would not happen with the two proposed Funds?” Dr Lishenga posed.