Healthcare costs set to rise despite SHIF rollout

Kenyans face higher healthcare costs despite the rollout of the Social Health Insurance Fund, a new report suggests.

A new global report projects medical inflation in the country to rise faster than ordinary consumer prices.

The 2026 Global Medical Trend Rates Report by global professional services firm Aon projects Kenya’s medical costs will rise by 13.5 per cent next year, compared to the country’s projected general inflation rate of 4.9 per cent.

The report places Kenya among African countries experiencing sustained pressure from rising healthcare costs.

This is driven by, among others, growing demand for medical services, dependence on imported pharmaceuticals and medical equipment, currency fluctuations and the increasing burden of chronic illnesses.

The findings come at a sensitive time for Kenya’s healthcare sector as the government pushes ahead with the implementation of SHIF under the broader Universal Health Coverage agenda.

The new system replaced the National Health Insurance Fund and introduced mandatory household contributions tied to income. The move, one of President William Ruto’s flagship programmes, has generated sharp public debate amid complaints over the high cost of living and concerns about affordability.

Under SHIF, formally employed workers contribute 2.75 per cent of their gross salary, while informal sector households are required to make annual contributions based on means testing. Critics have argued that the deductions are coming at a time when many households are already struggling with high food prices, taxes, rent and school fees.

The Aon report suggests those pressures could intensify if medical inflation continues outpacing normal inflation by such a wide margin.

According to the report, Kenya’s net medical trend rate, which measures medical inflation after accounting for ordinary inflation, is projected at 8.6 per cent in 2026, up from 7.5 per cent in 2025.

This means healthcare costs are expected to rise significantly faster than the prices of ordinary goods and services.

The report notes that employer-sponsored medical schemes across Africa are under increasing pressure due to chronic diseases, such as hypertension, cardiovascular illnesses, cancer and diabetes.

Globally, cardiovascular diseases remain the leading driver of medical costs, followed by cancer and hypertension.

The report further highlights obesity, poor nutrition and physical inactivity as growing contributors to healthcare inflation, warning that prescription drug costs are also rapidly rising globally.

The findings could renew questions about whether SHIF will adequately shield households from catastrophic medical costs or whether workers and employers will end up paying more into both public and private health systems simultaneously.

Already, many employers in Kenya are maintaining private insurance cover for workers despite mandatory SHIF deductions, largely due to concerns over gaps in public healthcare services and uncertainty surrounding the transition from NHIF.

The report indicates that globally, employers are increasingly resorting to cost-cutting measures to manage rising healthcare expenses, including renegotiating insurance contracts, introducing flexible benefit plans, increasing employee cost-sharing and expanding telemedicine and wellness programmes.

Kenyan companies have similarly been grappling with rising insurance premiums over the past few years, with some firms reducing outpatient limits, increasing co-payments or limiting coverage for dependants.

The continued rise in medical inflation may complicate the government’s push for universal healthcare unless public facilities are strengthened to reduce reliance on costly private hospitals and imported medicines.

The report also underscores Kenya’s vulnerability to external economic shocks due to heavy reliance on imported pharmaceuticals and medical technologies, factors that expose the country to exchange rate volatility and global supply chain disruptions.

Although Kenya’s projected medical inflation remains below countries such as Nigeria, Ethiopia and Malawi, it is still significantly above the regional inflation average and nearly three times the country’s projected ordinary inflation rate.

The findings are likely to fuel further debate over the sustainability of healthcare financing reforms at a time when households are increasingly sensitive to new deductions and rising living costs.