Sh4 billion allocated as government starts settling NHIF legacy debts

A fresh government payout plan has been introduced to start clearing long-standing medical debts owed to small health facilities, with the Treasury setting aside Sh4 billion to begin settling verified claims inherited from the former National Health Insurance Fund system.

The funds will go to hospitals and clinics whose confirmed claims do not exceed Sh10 million, as the State moves to address a backlog of unpaid bills estimated at between Sh30 billion and Sh33 billion across the country.

Treasury Cabinet Secretary John Mbadi said the money will be disbursed within the current financial year, targeting facilities whose claims have already been verified under the ongoing review process.

The payout plan is anchored on a directive issued on March 5, 2025 by President William Ruto, which ordered that all verified claims of Sh10 million and below be fully settled through the Social Health Authority system.

Under the arrangement, small and medium health facilities that meet the threshold will be paid in full once their documents are cleared, offering relief to providers that have struggled with delayed payments and cash flow shortages.

However, facilities with claims above Sh10 million will not receive immediate settlement. Their claims will first undergo detailed verification before the government develops a structured repayment schedule.

The Treasury says this phased approach is meant to ensure orderly clearance of the inherited NHIF debts while maintaining stability in the new health financing system under the Social Health Authority.

Officials note that the bulk of contracted health providers fall within the Sh10 million bracket, meaning many smaller facilities are expected to benefit in the first phase of payments.

The total outstanding obligations from the defunct NHIF are estimated at Sh30 billion to Sh33 billion, owed to a mix of public, private, and faith-based hospitals and clinics nationwide.

At the same time, the government reports that 31.2 million Kenyans have already registered under the Social Health Authority as reforms in the health sector continue to expand.

Further measures include the establishment of 228 primary care networks, recruitment and training of more than 107,000 community health promoters, and deployment of over 16,000 medical interns to strengthen service delivery at the grassroots.

Authorities say the broader objective is to clear inherited debts while stabilising healthcare financing and rebuilding confidence between health providers and the public health system.