Treasury CS John Mbadi Defends New Public Officers Medical Fund as Complementary to SHA

Treasury Cabinet Secretary John Mbadi has defended the newly proposed Public Officers Medical Fund, stating that it will enhance, not duplicate, existing health coverage under the Social Health Authority (SHA). The fund, designed to provide additional medical insurance to over 140,000 public servants, has drawn scrutiny from lawmakers questioning its necessity.

Speaking on Wednesday, July 16, during an appearance before the National Assembly’s Committee on Delegated Legislation, CS Mbadi clarified that the fund is intended to replace the now-defunct Comprehensive Medical Scheme that was in place for civil servants and disciplined forces since 2012.

Not a Duplication but a Complement

MPs on the committee, including Chairperson Samuel Chepkonga (Ainabkoi) and Vice Chair Githinji Gichimu (Gichugu), pressed the CS for a justification of the new fund. They questioned why it was being introduced when public officers are already covered under the SHA’s universal health plan.

In response, Mbadi explained:

“The provision of the enhanced medical benefits package for public officers is part of the Collective Bargaining Agreements (CBAs) between the government and the various public service officers’ unions.”

He emphasized that the new Public Officers Medical Scheme Fund will act as a top-up once SHA benefits are exhausted, ensuring that public officers retain access to comprehensive health services as part of their employment package.

Background: Transition from NHIF to SHA

The debate follows the October 2024 migration from the National Health Insurance Fund (NHIF) to the newly established Social Health Authority (SHA), which now oversees health insurance in Kenya.

Under the SHA model, all Kenyans—regardless of their contribution level—receive standardized care, including:

• Preventive and promotive care
• Curative and rehabilitative services
• Palliative services

This care is available at Levels 4, 5, and 6 health facilities across the country.

While the SHA offers essential services to all citizens, the shift led to the termination of the Comprehensive Medical Scheme that previously offered enhanced benefits to civil servants and members of disciplined services.

What the New Public Officers Medical Fund Will Offer

The draft regulations for the fund, titled Public Finance Management (Public Officers Medical Scheme Fund) Regulations, 2024, were published in November 2024. The new scheme is meant to support and extend the SHA’s basic coverage for public officers, and is designed to be budget-neutral for the government.

According to the draft:

“For civil servants to continue receiving this benefit from the Scheme as part of their remunerations, a Fund is proposed to enable civil servants first to receive the comprehensive range of quality health services from the Social Health Authority and, once this is exhausted, proceed with the limits provided for under the comprehensive medical insurance scheme for civil servants and disciplined services.”

Key Benefits to Be Restored Under the New Scheme

The proposed medical fund will restore several high-value health benefits that public officers previously enjoyed under the old comprehensive plan, including:

• Outpatient and inpatient services
• Specialised treatment, including surgeries and chronic disease management
• Dental and optical care
• Annual medical check-ups for the principal member and spouse
• Ambulance services (both road and emergency air rescue)
• Overseas treatment coverage for specialized care not available locally
• Group life insurance
• Last expense (funeral) cover
• Coverage for up to six dependents

These benefits were a major incentive in public service employment and formed part of contractual obligations between the government and public sector unions.

Union Agreements and Legal Obligations

The inclusion of these health benefits in CBAs adds legal weight to their reinstatement, as failing to provide them would place the government at risk of violating labour agreements.

According to Mbadi, restoring these benefits is not optional but part of Kenya’s commitment to protect public sector workers’ welfare, particularly those in roles that demand high physical and emotional exertion, such as police officers, teachers, and healthcare workers.

Political Pushback and Financial Concerns

Despite the CS’s assurances, some legislators expressed concern over the timing and financial implications of introducing a parallel fund during a period of fiscal austerity.

They questioned how the Treasury plans to finance the new scheme without creating overlap or redundancies in the healthcare budget. Some have also raised concerns about transparency and fund accountability, citing past inefficiencies in managing civil service insurance contracts under NHIF.

CS Mbadi insisted that the fund will be strictly regulated under the Public Finance Management Act and that it will not strain the national budget, as it replaces the existing government contribution to civil servants’ health packages.

SHA and Equity: The Bigger Picture

The transition to SHA was aimed at promoting equity in healthcare, ensuring that all Kenyans can access essential medical services. However, public officers argue that they shouldn’t lose previously negotiated benefits as a result.

Experts argue that striking the right balance between universal health coverage and employment-based health privileges is a delicate policy challenge—but one that can be managed with clear regulation and proper fund management.

Conclusion: Two Systems Working Together

In conclusion, the Public Officers Medical Fund is not a rival to SHA but a complementary support structure that acknowledges the contractual rights of public servants while maintaining the government’s broader commitment to universal health care.

CS Mbadi’s testimony reinforces the position that comprehensive coverage for public servants is a legal and moral obligation, not a luxury.

As the proposed regulations move closer to implementation, all eyes will be on Parliament and the Treasury to ensure the scheme is transparent, sustainable, and accountable to taxpayers and beneficiaries alike.