Robbing the sick: How County staff health covers have turned into deadly scams

Abdulahi* lies in a hospital bed in Isiolo County, reliant on an oxygen machine that costs Sh700 an hour. It’s been five days, and counting, battling breathing complications while bills mount alarmingly. He needs specialised care to survive.

The 45‑year‑old works for Isiolo County government and holds a valid medical insurance card, at least on paper. Yet when he needs it most, it is worthless. Both public and private hospitals have refused to accept it, and as his condition deteriorates, his family is forced to pay in cash.

“We are worried. His condition is not improving, and the bills are crushing us,” a relative told The Standard.

Abdulahi holds private insurance provided by the county and is also enrolled in the Social Health Insurance Fund (SHIF), which deducts a significant amount monthly. At this critical moment, one would hope this would be his lifeline, but it has failed him.

Fearing reprisals, he asked that his identity remain concealed. Yet his plight exposes what may be one of the greatest medical insurance scandals in Kenyan history, affecting county staff across the country.

“Most county staff are suffering in silence, virtually in every county. Top county officials and insurance providers do not want this exposed,” a source familiar with the matter said.

Even SHIF, the cornerstone of universal healthcare meant to replace now defunct National Health Insurance Fund (NHIF), now seems fraught with confusion, delays, and coverage gaps. Premiums are deducted, yet many cannot access treatment when it is needed.

An inquiry by The Standard uncovered disturbing evidence of a deeply systemic scheme that subjects county workers to unnecessary suffering while enabling unscrupulous public and private officials to siphon public funds.

Several counties have procured private insurance schemes to complement SHIF. Yet, irregular procurement and corruption appear entrenched. “This scam thrives in counties because, unlike stalled infrastructure projects, such as roads, failed health cover leaves no visible trace. After the financial year ends, it is buried,” a source explained.

“Rogue officials collude with insurance firms and brokers to suspend operations, pocketing the premiums. Astonishingly, this is prevalent with certain brokers and companies,” the source added.

At the scandal’s core are senior county officials, unethical insurance providers, crooked brokers, and in some cases, private hospitals, all conspiring in a conspiracy that drains medical cover, leaving patients abandoned.

Compelling records from the Office of the Controller of Budget (CoB) reveal a grave betrayal of public trust: in many counties, insurance premiums have been paid in full, yet thousands of county staff remain unable to access healthcare.

Out-of-pocket payments

The Kenya Healthcare Federation (KHF), which represents private healthcare providers, has warned that all civil servants, including county staff seeking care in private hospitals—are being forced to pay out of pocket.

KHF has pointed to the Social Health Authority’s (SHA) failure to process claims amounting to millions of shillings over the past nine months.

In a letter seen by The Standard and addressed to SHA CEO Dr Mercy Mwangangi, KHF chairman Dr Kanyenje Gakombe said hospitals are financially strained.

Currently, the Kenyan government owes hospitals Sh33 billion across private, public, and faith-based institutions, with an additional Sh32 billion owed under the Social Health Authority (SHA).

In Isiolo, where Abdulahi works, records from the Controller of Budget (CoB) show the county had already remitted Sh76 million by mid-June to its insurer, Jubilee Insurance, against a Sh120 million contract. The policy is managed by Transnep Insurance Brokers.

But for Abdulahi, the card in his wallet is worthless. “We presented the card at the hospital, but were told it stopped working long ago,” his brother recounted. “We got the same answer at two other hospitals. Why is it inactive when the policy hasn’t even been exhausted?” he poses.

Abdulahi’s plight is far from isolated. Across the country, county employees are facing the same nightmare, their insurance cards rejected at hospitals despite millions already paid to cover them. Curiously, but not surprisingly, the vexing medical insurance subject was conveniently pushed to the back burner in the just concluded devolution conference in Homa Bay County.

Tragedy strikes

One county staffer in Bungoma, speaking anonymously for fear of reprisals, put it bluntly: “No one can talk about it, but we are suffering. If you speak up, you’re marked. Most of us fear antagonising the same people who employed us,” he observed.

In one tragic case, a Bungoma County official suffering from a chronic illness died after being denied care due to an inactive insurance card.

“It was really traumatic for everyone here. His card was valid, but was rejected by the health providers. He didn’t have money to foot his bills and he died, leaving huge bills behind,” said a source.

Recently, the Bungoma County secretary issued a circular to county chief officers directing them to register their staff for Jubilee Insurance under the brokerage of Transnep Insurance Brokers. CoB records show that as of mid this year, Bungoma had paid Sh150 million to Karen Direct Insurance against a total sum of Sh299 million.

Some insurance experts call it one of the most clinical forms of theft in broad daylight. “Insurance is a cash-and-carry business. Premiums must be paid upfront. So why aren’t services being provided?” asked Alex Githae, an insurance expert.

Section 156(1) of the Insurance Act states insurers must receive payment before assuming any risk. While some counties negotiate to pay 50 per cent upfront and the remainder in instalments, service is still supposed to be accessible immediately.

Legal expert Julius Miiri said: “Once premiums are paid, the insurer is obligated to provide service as per the Insurance Act and policy terms.”

Two key oversight bodies are now under scrutiny: the Insurance Regulatory Authority (IRA), responsible for licensing and monitoring insurers; and the Public Procurement Regulatory Authority (PPRA), which is supposed to prevent inflated tenders and irregular contracts. Yet suspicious deals continue unhindered.

In Baringo, CoB data shows Kenya Alliance and First Assurance were paid Sh134 million. Still, junior staff report being turned away due to unpaid premiums. “We only have SHIF as junior employees. Other policies seem reserved for senior officials,” one staffer said.

Another added: “A colleague was recently turned away from a government hospital because the county hadn’t paid premiums.”

In Nyamira, a staff member narrated how he had to borrow money when his daughter’s treatment was rejected under Star Discovery Insurance, despite ongoing monthly deductions and a Sh172 million payment out of a Sh198 million contract.

“Some days the cover works, other days it doesn’t. We’ve resigned ourselves to this,” the employee lamented.

According to Miiri, insurers are legally required to notify clients if services are suspended, in line with principles of fair administrative justice.

In Vihiga, Edward*, a mid-level county employee, said he had never had comprehensive cover during his decade-long service. “I’ve only ever had NHIF, now SHIF. We were recently told we’d be covered, but nothing has changed,” he said.

He revealed that only top-ranking officers appear to have access to fully functional insurance.

Vihiga’s CoB records show Trident Insurance received Sh7.6 million out of Sh10.4 million. Still, many staff remain uncovered.

Lawyer Miiri says inflated tenders are awarded to the highest bidders in exchange for kickbacks, leading to exploitation and exclusion of genuine service providers.

In Kilifi, Charo* rushed his pregnant wife to a hospital only to find their policy inactive.

Frozen accounts

“I almost lost my wife. We had faith in the medical card. Luckily, a relative helped pay,” he said.

Despite over Sh350 million spent on insurance, Kilifi staff continue to pay out-of-pocket or turn to fundraisers. “For this financial year, we’ve only accessed the cover for four months,” said a Kilifi worker.

In rare accountability, PPRA flagged Kilifi’s 2024/2025 tender over non-competitive bidding concerns. In Meru, the same broker, Transnep, handled the county’s 2024/2025 insurance tender, with Trident as underwriter. However, services were paralysed when hospitals refused to honour the cover.

“There was uproar. Trident’s accounts were frozen, and hospitals didn’t trust them,” a Meru official said.

The breakdown in service delivery contributed to the impeachment of former Governor Kawira Mwangaza. Even under new leadership, issues persisted.

“Eventually, the underwriter was changed to Jubilee Insurance under questionable circumstances,” the official said.