One of Kenya’s most ambitious social policies in decades has survived a major constitutional challenge in the High Court, after Justice Bahati Mwamuye upheld the legality of the Social Health Insurance Fund (SHIF) despite faulting how it was rolled out.
- •In his judgment, Justice Mwamuye ruled that SHIF’s controversial KSh 104.8 billion digital-health contract was lawful, and confirmed that the government had the authority to replace the old NHIF system.
- •At the same time, the court found that the way the reform was rolled out violated constitutional rights after thousands of patients were left struggling to access treatment during the transition; adding that the state moved faster than its own systems could handle.
- •By the time the case was heard, millions of Kenyans had already registered under SHIF and the old NHIF structure had effectively been dismantled.
“The evidence shows that, during the early phase of implementation, many Kenyans were unable to access essential and life-saving medical services. In constitutional terms, this was not a mere administrative inconvenience, it was a failure that implicated the State’s obligations,” Justice Mwamuye stated.
The petitioner, Busia Senator Okiya Omtatah argued that the government rushed the shift from NHIF to SHIF, relied on regulations that were not properly approved, and created a complex new system of funds before the underlying infrastructure was ready.
The Ministry of Health awarded the KSh 104.8 billion deal to a consortium led by Safaricom to build the national Integrated Health Information Technology System, the digital platform meant to run registration, contributions, and claims processing across the country.
Critics argued the procurement process bypassed normal competitive bidding, relied on a controversial “special procurement” clause in public-procurement law, and expanded dramatically in size during negotiations. They also argued the state should not have launched a universal health-insurance system while the digital backbone was still untested.
The government’s defence rested on the opposite argument that the reform was a strategic national project too large for conventional procurement and too urgent to delay. Officials also argued that halting the system would destabilize health financing for millions of people who had already moved to the new scheme.
The court ruled that the Social Health Insurance Act itself is constitutional and that the government had the legal authority to create the new funds and issue the regulations needed to run them. The judgment also rejected claims that Parliament or the Senate had improperly handled the rules governing the system.
On procurement, the court upheld the legality of the special procurement mechanism used to award the digital-health contract and found that the Ministry of Health acted within the law in selecting the consortium. Although the judgment acknowledged weaknesses and irregularities in the process, it concluded they were not strong enough to invalidate the contract itself.
Invalidating the system would have left the country without a functioning national health-insurance framework and disrupted payments to hospitals that had already begun adjusting to the new model.
Instead, the court ordered the government to correct the failures, protect patients during the transition, and report back within 90 days on what it has done to stabilize the system.
Currently, SHA has onboarded about 24.7 million people, according to the government, but figure the official number has become deeply contentious as audits and parliamentary hearings question how many of those enrollees are actually contributing to the scheme.
Moreover, billions of shillings have reportedly been lost through fraudulent claims, ghost facilities, and payments made without proper documentation. The entire scandal has raised doubt on whether the multi‑billion digital system underpinning SHA, intended to modernize healthcare payments, will curb the losses initially associated with the defunct NHIF.
