High Court Declares Social Health Insurance Fund Unconstitutional

The High Court has declared the Social Health Insurance Fund (SHIF) unconstitutional.

A three-judge bench ruled on Friday, July 12, giving Parliament 120 days, until November 20, 2024, to make amendments to the said Act.

Justices Alfred Mabeya, Robert Limo and Fridah Mugambi instructed Parliament to undertake adequate public participation in accordance with the constitution before enacting the same act and amending the unconstitutional provisions.

"This should be done within 120 days. If they fail to, the Act shall remain suspended," the judges ruled.

A logo of the Social Health Authority. /FILE

In layman's terms, the verdict declared all laws enacted by President William Ruto’s administration to overhaul the health care system as "null and void."

“A declaration is hereby issued that the entire Social Health Insurance Fund Act 2023, the entire Digital Health Act 2023, and the Primary Health Act 2023 are all unconstitutional and therefore legally null and void," the judges further ruled.

It was the court's finding that the programme had burdened a few salaried individuals, thus creating a disparity in the contribution.

The decision effectively puts a stop to the implementation of SHIF, a project designed to replace the embattled National Health Insurance Fund (NHIF).

The Social Health Insurance Act, No. 16 of 2023 (SHIFA), which received presidential assent on October 19, 2023, and became effective on November 22, 2023, aimed to establish the Social Health Authority.

This body would manage social health insurance, fulfilling Article 43(1)(a) of the Constitution, which guarantees every citizen the right to health care services.

This ruling comes just 81 days before the scheduled rollout of SHIF, casting a shadow of uncertainty over the transition. Kenyans had expressed concerns that the July 1 deadline was too soon, indicating a lack of preparedness for the new health scheme, a matter that saw the rollout pushed to October 1.

This is notably the second time the SHIF has encountered turbulence at the High Court. A ruling on November 27, 2023, suspended the Act which sought to introduce the following bills: The SHIF, Primary Health Care Act, and the Digital and Digital Health Act. The suspension was lifted on January 19, 2024.

SHIF carried the most significance since this is the one that abolished the NHIF officially for the first time since 1966.

By revoking NHIF and replacing it, President Ruto seeks to attain Universal Health Coverage (UHC) as set out within his plan for a healthier nation espoused under the Bottom Up Economic Transformation Agenda (BETA).

This latest ruling now represents a significant setback for President Ruto’s administration, which had touted SHIF as a critical component of its healthcare strategy.