Over 23 million Kenyans registered for SHA, but more than 17 million aren’t contributing to the fund

Over 23 million Kenyans have registered with the Social Health Authority (SHA)—but only about 5.6 million are actually contributing to the fund. That leaves more than 17 million people effectively riding for free on the system.

This isn’t just a gap; it’s a looming crisis.

Ministry of Health data shows that of the contributors, over 4.9 million are formal sector employees, while just over 1.4 million come from the vast informal sector, which makes up the bulk of Kenya’s workforce.

The result is a heavily unbalanced system, with a small group shouldering the cost of healthcare for millions who remain inactive.

SHA was founded on the principle of shared responsibility for universal health coverage. But when contributions fall far short of registrations, that principle begins to unravel.

Informal sector workers

According to its founding manifesto, SHA was designed as an inclusive platform, particularly to integrate informal sector workers, who account for over 80 per cent of Kenya’s workforce, into the national health coverage framework. This group had long been excluded under the now-defunct NHIF, and SHA promised to fix that historic oversight.

Yet, nearly a year after enrolment began, that promise remains largely unfulfilled.

While many informal workers have signed up, most are neither contributing nor benefiting from the system. Without regular payments, they cannot access the healthcare that SHA was meant to provide.

This not only threatens SHA’s financial stability but also exposes a deeper failure to engage the very population it was created to serve. Without meaningful participation from the informal sector—the backbone of the economy—the goal of inclusive, equitable healthcare for all Kenyans drifts further out of reach.

At the centre of SHA’s struggles is a costly and misunderstood contribution model.

High premiums

The widely publicised 2.75 per cent premium was initially marketed as affordable, with informal sector workers led to believe they would pay around Sh300 per month. In reality, many face premiums of Sh600 or more, and are required to pay the entire annual amount upfront.

To ease this burden, the government introduced the option to borrow from the Hustler Fund to cover SHA contributions. But on the ground, the idea has been met with confusion, mistrust, and resistance.

"What happens if I can’t repay the loan?"—This is the question troubling many Kenyans who have already defaulted on previous Hustler Fund loans.

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• Health
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• Social Health Authority
• SHA
• hustler fund loans
• Private Hospitals
• SHA payments. health fund
• Over 23 million Kenyans registered for SHA
• but more than 17 million aren’t contributing to the fund

Paul Mokaya, a boda boda rider in Nairobi, borrowed Sh500 from the Hustler Fund when it launched, assuming it was a government gift.

"Now they expect me to take another loan just to pay for health insurance?" he asks. "Why not let me use that money when I’m actually sick?"

Mokaya’s expected SHA contribution exceeds Sh7,000 a year—payable in one lump sum.

"If I could pay NHIF monthly, why am I being forced to pay the whole year at once now?" he says. "'Lipa mdogo mdogo' sounded like a good idea, but it feels like a trap."

Lost faith in SHA

Lucy Adhiambo, a mother, also lost faith in SHA after a bitter experience. She had registered her son as a dependent, but during a medical emergency discovered he was not recognised in the system and that coverage would not take effect immediately.

"They told me I had to wait. But who wants to wait when their child is sick, and you have no money?" she says, explaining that she was forced to pay out of pocket.

Another father, who had been faithfully contributing, faced a similar ordeal when his son was admitted to a referral hospital. He was told to pay the full annual premium on the spot—or cover the bill himself.

"I thought I was covered. They gave no explanation. Just—'pay or leave'."

These are not isolated incidents. An Eastleigh Voice spot check found a growing pattern of out-of-pocket payments, particularly for those with unresolved registration errors, dependency issues, or partial payments.

Meanwhile, SHA is battling internal scandals. In less than a month, 75 healthcare facilities were suspended over allegations of fraud, collusion, and billing ghost patients—problems reminiscent of the NHIF era.

Without urgent reforms, clearer communication, and a more flexible payment model, SHA risks becoming exactly what it was meant to replace: a system that excludes the poor, frustrates the honest, and fails the sick.

Out-of-pocket payments

As public trust erodes, out-of-pocket harambees are making a comeback, reviving the financial strain SHA was meant to eliminate. When a health system fails, the cost quickly shifts back to individuals, and that is exactly what is happening.

Private hospitals are now increasingly rejecting SHA coverage for civil servants, demanding cash payments instead. This mirrors the NHIF years, when delayed payments caused widespread service disruptions. NHIF’s collapse left behind a Sh33 billion debt, now inherited by SHA.

President William Ruto has pledged to settle the outstanding claims. He announced that 91 per cent of health facilities—those owed Sh10 million or less—would be paid in full immediately. The rest, with larger claims, would undergo a 90-day verification process before payment.

Unsettled arrears

A task force appointed by Health Cabinet Secretary Aden Duale to audit the debt was disbanded by the courts, leaving most of the arrears unsettled.

Another worrying development is the revival of the biometric authentication system, criticised during the NHIF era for frequent breakdowns and access issues. While intended to curb fraud, biometric verification often blocked genuine patients from care due to technical failures, downtimes, or a lack of infrastructure in rural areas.

Its reintroduction under SHA has already sparked concern among healthcare providers and beneficiaries, who fear a repeat of past failures in an already fragile system.

Patient advocacy groups also report that SHA has suspended overseas treatment coverage, leaving critically ill Kenyans stranded in foreign hospitals.

Among the most distressing cases is that of a baby in need of open-heart surgery at Fortress Memorial Hospital in India. Although the Kenyan government issued a Sh500,000 Guarantee of Payment, the funds were never released, preventing the procedure from taking place. The surgery has been indefinitely delayed, leaving the child in limbo, another casualty of a failing system.