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The National Hospital Insurance Fund is a parastatal that was established in 1966 as a department in the Ministry of Health of Kenya.The head office is located along Ragati Road at Upperhill in Nairobi. The original Act of Parliament that set up this Fund in 1966 has over the years been reviewed to accommodate the changing needs of the Kenyan population, employment and restructuring in the health sector. Currently an NHIF Act No 9 of 1998 governs the Fund.

The transformation of NHIF from a department of the Ministry of Health to a state owned corporation was aimed at improving effectiveness and efficiency. The Fund's core mandate is to provide medical insurance cover to all its members and their declared dependants (spouse and children). The NHIF membership is open to all Kenyans who have attained the age of 18 years and years and have a monthly income of more than Ksh 1000 which is aproximately $150.

NHIF has 31 fully autonomous branches across the country. Each of these branches offers all NHIF services including payment of benefits to hospitals or members or employers. Smaller satellite offices and service points in district hospitals also serve these branches.

It is mandatory for those in the formal sector to be members.For those in the informal sector and retirees membership is open and it is voluntary. Remittances by individuals who have a salary are remitted directly by their employers through cheques or E-banking.For those in formal employment, contributions are made as per their income.For members under the voluntary category, they pay Kshs.160 which is approximately $2 per month.

INTRODUCTION OF NEW RATES
The new defunct NHIF contribution rates were to take effect as from 1st May 2012.This was in a move to introduce the universal Kenya has had a history of health financing policy changes since its independence in 1963. Recently, significant preparatory work was done on a new Social Health Insurance Law that, if accepted, would lead to universal health coverage in Kenya after a transition period.

Questions of economic feasibility and political acceptability continue to be discussed, with stakeholders voicing concerns on design features of the new proposal submitted to the Kenyan parliament in 2004. For economic, social, political and organisational reasons a transition period will be necessary, which is likely to last more than a decade. However, important objectives such as access to health care and avoiding impoverishment due to direct health care payments should be recognised from the start so that steady progress towards effective universal coverage can be planned and achieved. Currently the new rates have not been put into effect.Each individual was to contribute according to the amount of salary they earn whereas the voluntary members were to pay a fixed rate of Ksh 500 per month.The members were to enjoy both inpatient and outpatient benefits.Currently the members only enjoy the inpatient benefits.