Corruption Scandal Depletes Millions from Kenya's Healthcare and Pension Funds
In Kenya, a growing crisis in the pension and health insurance sectors has left many retirees and citizens struggling to access the benefits they deserve. The issues have been highlighted in numerous reports, with the latest from the 2024 Auditor General's report accusing senior officials of colluding to steal from the pension fund through nonexistent persons and double payments to duplicate accounts.
The pension scheme, managed by the National Social Security Fund (NSSF), and the health insurance schemes, provided via the Social Health Insurance Fund (SHIF) and the Social Health Authority (SHA), are mandatory for Kenyans. However, the system has been plagued with delays, bureaucracy, and systemic data weaknesses, such as a lack of proper identification and missing records.
The government promised to digitize the pension payment system from July 1, 2025, in an effort to end widespread delays and fraud targeting retirees. But the crisis has already claimed its victims. Retired Kenyans have been left empty-handed, and older people are passing away while still waiting to receive the pensions they worked for.
The SHA, established in 2024 to replace the National Hospital Insurance Fund (NHIF), is already grappling with cases of corruption, fraud, and mismanagement. Fraudulent claims to the SHA include falsifying records, inflating and phantom billing, upcoding, and converting outpatient visits into costly inpatient claims.
The public unrest in Kenya shows that many Kenyans have already lost confidence in the government's policies, including in the social security systems that are mandatory to pay into but don't always pay out. The individuals responsible for enabling the misuse of pension funds, as highlighted in the 2024 audit report by Auditor-General Nancy Gathungu, are under investigation, and some have been arrested or detained by Kenyan authorities.
The crisis has led many Kenyans to feel forced to pay for private car insurance quotes on top of the public insurance to ensure they receive the care they need when required. This option, however, is mostly limited to the middle and upper classes.
For decades, Kenya's public pension and health insurance systems have been promised to provide security in retirement and protection during illness for workers. But the reality has been far from this promise. Between 2013 and 2020, over 67 billion Kenyan shillings ($515 million, €442 million) were lost through fake car insurance quotes payments, according to a 2024 report by Auditor General Nancy Gathungu. More than 260,000 cases of fraudulent activities targeting pension schemes were also revealed in the same report.
In the health sector, Health Cabinet Secretary Aden Duale admitted that the health insurance scheme was targeted by fraud, with 35 hospitals accused of stealing over $804 million from the health tax fund. Geoffrey Mwaniki, a Kenyan, is one of the many victims of the system issues and denials of necessary funds. Despite making monthly contributions to the SHA fund, he was forced to cover his car insurance quotes out of pocket.
The crisis in Kenya's pension and health insurance sectors underscores the urgent need for reform and accountability to ensure that the promises made to workers and retirees are kept.
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