Table 1 Summary of two financing scenarios explored in the SimIns basic model

Scenario 1: Contributory system: Social health insurance (SHI) scheme

This scenario mirrors the preferred government financing model for UHC in which all Kenyans are expected to contribute premiums to a scheme (SHI). This financing scenario retains most of the design features of the current public insurer, the National Hospital Insurance Fund (NHIF), which is the preferred government organization for UHC. Under Scenario 1, government funding plays a complementary role to premium contributions. With the majority of formal sector workers already covered by the NHIF, the design of a future scheme is targeted at gradually enrolling and retaining informal sector workers through a mix of strategies including wireless premium payments and devolved registration centers and an expanded benefits package. Some of these strategies are already in place. Formal and informal sector workers are expected to pay standardized premium rates but the government will pay contributions for the indigent. It is not clear how the indigent will be identified. All population groups are expected to be under a single national pool with the aim of achieving universal population coverage by 2030. The proposed benefit package is quite wide and includes basic outpatient and inpatient services and maternity. Outpatient services include consultation fees, laboratory investigation, drug administration and radiological examination, among others. Inpatient services include bed and theatre charges, nursing care, fees for personnel (physicians and surgeons) and drugs, among others. Utilization of these services is expected to increase gradually as more people are covered. There will be no co-payments for using public sector facilities but those who choose to use private sector services are expected to co-pay between 2% of the costs for low-cost private sector facilities to 90% of the cost for high-end private facilities. Although the option of using private providers with co-payments exists, there were proposals within the NHIF to restrict NHIF services to public sector facilities only to address cost-escalation. Should this be the case, there is expected to be pressure to significantly improve the quality of public sector services which currently are perceived to be of poor quality and lack value for money.

Scenario 2: Non-contributory system: predominantly tax funded system

Under the alternative scenario, government revenue is complemented by the existing statutory premium deductions from formal sector workers and pensioners. Specifically, general government revenues are meant to provide coverage for informal sector workers and the indigent population. Both government revenue and health insurance contributions by formal sector workers will be pooled into the NHIF, which will purchase services for the whole population. The non-contributory scenario is expected to rapidly increase population coverage and utilization of services and should therefore be accompanied with efforts to rapidly improve public sector services. Public spending on health care is also expected to grow rapidly to meet rising demand for health services for the entire population. The benefit package considered is similar to the one in Scenario 1, consisting of essential services but with emphasis on the use of public sector facilities. Such restriction, as with the case with Thailand’s universal coverage scheme [26], is expected to save costs more than it would in a contributory system. The assumption is that there will be no co-payments for those who use public facilities. On the other hand, wealthier individuals are likely to use private services to complement those that they are entitled to from the public sector.