SHIF One Year On: What Actually Improved—and What Didn’t After NHIF Was Scrapped

Kenya’s Social Health Insurance Fund (SHIF) has now operated for almost two years since the National Health Insurance Fund (NHIF) was replaced on 1 October 2024. The important question is no longer how SHIF works, but whether Kenyan households, employers, informal workers, and healthcare facilities have experienced measurable improvements.

The evidence presents a mixed picture. Registration expanded substantially, billions of Kenyan shillings were paid to healthcare providers, and the system introduced wider digital registration and claims-verification processes. At the same time, hospitals continued reporting delayed reimbursements, patients experienced identification and approval problems, and the fund’s claims expenditure exceeded its contribution income during the first financial year.

This follow-up examines the available outcomes—not political promises—using enrolment figures, payment data, official statements, and reports on the operation of the Social Health Authority (SHA).

What Changed After NHIF?

The Social Health Insurance Act, 2023 established the Social Health Authority and created three main funds:

• The Social Health Insurance Fund.
• The Primary Healthcare Fund.
• The Emergency, Chronic and Critical Illness Fund.

SHIF replaced NHIF as the contributory health insurance fund. Contributions changed from NHIF’s previous fixed contribution bands to a percentage-based system linked to household income.

The Social Health Insurance Act, 2023 also placed responsibility for registration, contribution collection, fund management, beneficiary administration, and provider contracting on SHA. Section 27 deals with contributions, including the employer’s responsibility to remit employee deductions. Section 27(6) provides for a penalty of 2% of the outstanding contribution for every month that a remittance remains unpaid.

For employees, the change created a payroll item based on gross salary rather than the former NHIF tier. For informal workers, the framework introduced direct contribution arrangements and later payment flexibility through initiatives such as “Lipa SHA Pole Pole”.

The distinction is important: SHIF is the fund, while SHA is the authority administering the broader health insurance system.

What Improved?

1. Registration increased

One of the clearest measurable changes was the increase in reported membership.

In August 2025, the Ministry of Health reported that SHA membership had risen from approximately 8 million NHIF members to 28.8 million registered members under the new authority. That represented a reported 22.3% increase in social health insurance membership compared with the previous NHIF position, although the figures reflect different registration systems and should not automatically be interpreted as equivalent levels of active coverage.

By April 2026, the Ministry reported that more than 30 million Kenyans had been registered under SHA. Another September 2025 Ministry report gave a more cautious distinction: more than 26 million Kenyans were registered nationally, but only 7.3 million were active contributors.

This difference between registration and active contribution is central. A person may appear in the SHA database without having a fully paid and active contribution status. Therefore, the registration number indicates administrative reach, not necessarily the number of people who can access every available benefit at a particular time.

The practical improvement was the creation of a larger national database. The unresolved issue was converting registration into consistent, active coverage.

2. More money reached health facilities

SHA began paying claims under the new fund, with reimbursements directed to public, private, and faith-based providers.

Reported figures as of 25 August 2025 showed that hospitals had submitted claims worth KSh82.7 billion, while primary healthcare facilities had submitted a further KSh9 billion. SHIF had paid approximately KSh53 billion to hospitals and KSh7.7 billion to primary healthcare facilities at that point.

The claims process was not limited to one type of provider. By September 2025, reported disbursements had reached KSh59.3 billion, including:

• KSh13.7 billion to county facilities.
• KSh9.9 billion to faith-based health institutions.
• KSh5.9 billion to national referral hospitals.

These payments demonstrate that the fund became operational and that facilities were receiving money through the new system. However, the payment totals do not mean every submitted claim was paid immediately or in full.

In the 2025/2026 financial year, reported SHA payments to counties rose from KSh12.7 billion in the previous financial year to KSh21.36 billion. Between July 2025 and April 2026, SHIF reportedly paid KSh65.42 billion across 4,718 facility payment records covering all 47 counties.

3. Primary healthcare received greater attention

The new framework separates primary healthcare financing from the contributory SHIF fund. This structure was intended to support basic services closer to where people live, including services delivered through primary healthcare facilities and community-level systems.

The Ministry of Health reported that 106,542 Community Health Promoters had been trained and equipped, representing 99.6% of the stated target. It also reported that 8.8 million households had been registered on the Electronic Community Health Information System out of a target of 12.5 million.

These measures point to a broader shift from relying mainly on hospital treatment toward collecting household and community health information. The outcome is an expanded administrative and community-health infrastructure, although registration and training do not by themselves prove that every household receives timely or affordable treatment.

4. Digital verification became a central feature

SHA introduced stronger digital and biometric processes for member identification, facility access, registration, and claims management.

The Ministry of Health reported that SHA and the Digital Health Agency were working with biometric providers and the National Registration Bureau to improve system stability and reduce reliance on one-time-password whitelisting. The Ministry also acknowledged recurring ICT disruptions, digital errors, and biometric difficulties, particularly for older people.

The improvement is the move toward electronic verification and centralised records. The weakness is that a digital system can create a new access barrier when records are incomplete, identity information does not match, or the platform is unavailable at a facility.

5. Payment flexibility expanded for informal workers

Formal-sector workers generally contribute through employer payroll deductions. Informal workers do not have the same regular payroll structure, so collecting contributions from them presents a different administrative challenge.

The government introduced the “Lipa SHA Pole Pole” approach to allow instalment-based contributions. Official Ministry communications also referred to planned changes from monthly to annual payment cycles to improve flexibility and compliance.

This was a practical response to irregular income patterns among traders, casual workers, farmers, transport workers, and other self-employed people. It does not eliminate the affordability problem, but it recognises that a uniform monthly collection method may not reflect how informal-sector income is earned.

What Did Not Improve Enough?

1. Claims backlogs continued

The largest operational complaint from healthcare providers was delayed payment.

As of August 2025, reported submitted claims included KSh10.6 billion in rejected claims, KSh6.4 billion approved but awaiting disbursement, KSh7.6 billion under review, KSh3 billion undergoing reevaluation, and KSh2.1 billion under surveillance for further verification.

A claims-verification process is necessary to detect duplicate, inflated, or unsupported claims. However, verification delays affect a facility’s cash flow. Hospitals still need to pay employees, suppliers, utilities, medicine distributors, and other operating costs while waiting for reimbursement.

In October 2025, the Ministry of Health acknowledged outstanding arrears, digital and empanelment errors, ICT problems, and the need to improve dispute resolution. The parliamentary discussions also identified the need for more equitable reimbursement for ambulance and referral services.

The result was a system that processed and paid substantial sums but did not yet deliver consistently predictable settlement times for all providers.

2. Registration did not equal active cover

The gap between registered members and active contributors remained substantial.

In Siaya County, for example, the Ministry reported that 404,088 residents—40.7% of the population—were registered under SHA, but only 26.7% were fully paid up and active. The same report stated that more than 26 million Kenyans were registered nationally, compared with 7.3 million active contributors.

This distinction affects how headline membership numbers are interpreted. A database may contain a person’s details, but access to contributory benefits can depend on whether contributions are current and active under the applicable rules.

For households with irregular income, the challenge is not simply awareness or registration. It includes the ability to maintain contributions over time, especially when income varies from week to week or season to season.

3. Health facilities still faced uncertainty

Facilities reported several issues beyond delayed payment:

• Incorrect or incomplete empanelment information.
• Claims rejected because of data mismatches.
• Biometric identification failures.
• Unclear reimbursement treatment for some services.
• Delays in resolving disputed claims.
• Different payment experiences between public, private, and faith-based providers.

The Ministry’s own parliamentary response referred to recurrent system hitches, governance and coordination gaps, and frequent ICT disruptions. It also stated that technical working groups were being created to address the issues.

This means the new system had moved beyond the launch stage but was still undergoing operational correction. The existence of a claims-management system improved traceability, but traceability is not the same as fast settlement.

4. SHIF expenditure exceeded contribution income

Financial sustainability was another unresolved issue.

The 2026 Economic Survey figures reported by Kenyan media indicated that SHIF collected KSh57.7 billion in the 2024/2025 financial year, while claims amounted to KSh91.5 billion, including KSh33.4 billion in outstanding claims liabilities. The reported utilisation ratio was 158.6%.

Put simply:

[ \text{Utilisation ratio} = \frac{\text{Claims incurred}}{\text{Contribution income}} \times 100 ]

Using the reported figures:

[ \frac{91.5\text{ billion}}{57.7\text{ billion}} \times 100 = 158.6% ]

This means reported claims obligations were greater than the contributions collected during the period. It does not, on its own, prove that the fund is permanently insolvent. Claims may include liabilities from earlier periods, and the wider SHA structure includes other funds and government financing arrangements. It does show, however, that contribution collections and benefit obligations required close monitoring.

For a simple household illustration, if a fund collected KSh10 million and incurred eligible claims of KSh15.86 million, its utilisation ratio would also be 158.6%. The difference would need to be addressed through additional financing, improved collections, expenditure controls, or changes in benefit administration.

5. Patients still reported access problems

The experience at the hospital level did not always match the national payment figures.

Reports in 2026 indicated that money was flowing more consistently to counties, but patients continued to complain about being unable to obtain services at some facilities. The causes included system outages, member-status problems, provider concerns about reimbursement, and questions about which services were covered under particular packages.

This is a key distinction:

• A national payment increase measures money transferred to providers.
• A patient-access outcome measures whether a person received the required service at the time of need.

Both measures matter, but they are not interchangeable. A facility can receive some SHA payments and still experience delays in other claims or lack cash for specific medicines and services.

SHIF and NHIF Compared

The comparison should not be read as proof that every Kenyan experienced a better or worse outcome. NHIF and SHA use different structures, measures, and reporting systems. The most reliable conclusion is that SHIF expanded the administrative scope of public health insurance while retaining major implementation challenges.

How to Read the Numbers

When evaluating SHIF performance, five numbers should not be confused:

1. Registered members: People recorded in the SHA system.
2. Active contributors: Members whose contribution status is current under the applicable rules.
3. Claims submitted: Amounts requested by healthcare providers.
4. Claims approved: Amounts accepted after verification.
5. Claims paid: Amounts actually disbursed to providers.

For example, if a hospital submits claims worth KSh20 million, SHA approves KSh16 million, rejects KSh2 million, and places KSh2 million under review, the hospital has not received KSh20 million. If KSh10 million is paid immediately and KSh6 million is awaiting disbursement, the claims pipeline remains KSh6 million even though the claim has been approved.

This distinction is useful for employers, facility managers, researchers, and households reviewing public statements about “funds released” or “claims processed”.

ToolBase Tools That Can Help

A Kenyan employee can use a salary calculator to model the effect of a percentage-based SHIF deduction on gross pay and compare gross salary with estimated take-home pay. The calculation is educational and does not replace an employer’s payroll record or an official SHA assessment.

A budget calculator can also show how a recurring contribution affects a household’s monthly cash-flow plan. For example, a household can enter monthly income of KSh60,000, regular housing costs of KSh18,000, food costs of KSh15,000, transport of KSh8,000, and other expenses of KSh10,000. The remaining balance can then be viewed before and after the applicable health contribution.

For payroll teams, ToolBase’s salary calculator can support planning and educational comparisons. Actual deductions should be checked against current official payroll instructions and SHA notices.

Final Assessment

One year after NHIF was scrapped, SHIF and SHA showed measurable progress in registration, digital administration, primary-healthcare financing, and payments to healthcare providers. Reported membership expanded from the former NHIF figure, billions of Kenyan shillings reached facilities, and the new architecture created separate funds for primary, emergency, chronic, and critical care.

The unresolved issues were equally significant. Registered members were far more numerous than active contributors, claims backlogs continued, digital and biometric faults affected access, and reported claims expenditure exceeded contribution income in the first financial year. The evidence therefore supports a mixed assessment: SHIF became operational and widened the system’s reach, but the quality, reliability, and financial sustainability of that coverage remained works in progress.

This article is for educational purposes only and does not constitute professional advice. Consult a qualified professional for your specific situation.