Determinants of Enrollment and Retention in a National Social Health Insurance Scheme: A Study of Organized Informal Sector Groups in Nairobi County, Kenya

1.0 Introduction

The global pursuit of Universal Health Coverage (UHC) aims to ensure that all people can access quality health services without suffering financial hardship (World Health Organization, 2010). In Kenya, the National Hospital Insurance Fund (NHIF) is positioned as the primary vehicle for achieving UHC, with a strategic focus on expanding coverage to the informal sector, which constitutes approximately 78% of the national workforce (Republic of Kenya, 2017). Despite the introduction of an enhanced benefits package in 2015, which expanded coverage to include outpatient services, enrollment and retention among informal sector workers remain critically low, at less than 12% against a target of 80% (NHIF, 2016).

This gap between policy intention and actual uptake presents a significant challenge to Kenya's UHC ambitions. While previous studies have highlighted general challenges in covering the informal sector (Bitran, 2014; Okungu et al., 2015), there is a lack of empirical evidence specifically examining the barriers to enrollment and retention following the launch of NHIF's improved benefits. This study addresses this gap by investigating the determinants of enrollment and retention among organized informal sector groups in Nairobi County, Kenya.

2.0 Literature Review

2.1 The Challenge of Covering the Informal Sector

The informal sector in Kenya, often referred to as Jua Kali, is characterized by small-scale, low-income enterprises with irregular cash flows and a lack of formal employment contracts (Osei-Akoto & Adamba, 2011). This population faces a dual burden of high healthcare needs and limited financial capacity, making them vulnerable to catastrophic health expenditures (Chuma & Maina, 2012). Social Health Insurance (SHI) schemes like NHIF are designed to pool this risk, but their voluntary nature for informal workers creates challenges of adverse selection and low retention (Kotoh, 2017).

2.2 Determinants of Insurance Uptake

Existing literature identifies a multifaceted set of factors influencing health insurance uptake among informal sector workers. Socio-demographic factors, including age, income, education level, and marital status, have been shown to correlate with enrollment likelihood (Kinyua, 2013; Ndung'u, 2015). Knowledge and awareness — understanding of benefit entitlements — is a critical precursor to both enrollment and utilization (Owusu et al., 2013; Barasa et al., 2017), and information asymmetry often leads to low utilization and dissatisfaction. Access to services, encompassing the conceptual framework of availability, affordability, and acceptability, is likewise crucial (McIntyre & Thiede, 2007): even with financial coverage, if services are not physically available or delivered respectfully, enrollment will suffer.

3.0 Methodology

3.1 Research Design

This study employed a descriptive cross-sectional design to provide a snapshot of the determinants of NHIF enrollment and retention among organized informal sector groups.

3.2 Study Setting and Population

The study was conducted in Kibera, Nairobi County, an area with a high concentration of informal sector activity. The target population was members of three large, registered self-help groups (one women's group, one youth group, and one mixed group), with a total membership of 350 individuals.

3.3 Sampling and Data Collection

A sample size of 88 respondents was determined using Yamane's (1967) formula. A random sample was selected from each of the three groups. Data were collected over three weeks using semi-structured interviews conducted by trained research assistants.

3.4 Data Analysis

Quantitative data were analyzed using descriptive statistics (frequencies, percentages) with the Statistical Package for the Social Sciences (SPSS) version 24. Qualitative data from open-ended questions were analyzed using thematic content analysis.

3.5 Ethical Considerations

Ethical approval was obtained from Strathmore University Institutional Review Board (Ref: SU-IRB 0162/18). Informed consent was secured from all participants, and confidentiality was maintained throughout the research process.

4.0 Results and Findings

4.1 Socio-Demographic Characteristics and NHIF Membership

The study achieved a 95% response rate (84/88). Analysis revealed significant associations between socio-demographic factors and NHIF membership. Members above 37 years and those who were married showed higher enrollment rates, suggesting that family responsibilities influence the decision to enroll. A strong correlation was found between income level and enrollment: over 50% of the highest earners (above KES 13,000/month) were enrolled, compared to none in the lowest income bracket (below KES 2,000/month). Enrollment also increased with education level, with 37% of those with secondary education enrolled compared to 9.6% with primary education, highlighting the role of awareness.

4.2 Views on the NHIF Benefit Package

The vast majority of respondents (87.5%) viewed NHIF membership as important, primarily citing financial risk protection as the key motivation. One participant described the card as functioning like a form of savings that minimized challenges in clearing hospital bills. Furthermore, 86.2% found the benefit package adequate, and 89.5% would recommend it to others, indicating that the package itself is not the primary barrier.

4.3 Knowledge and Understanding of Entitlements

A critical finding was the significant knowledge gap among members. On average, respondents were aware of only 59% of the benefits in the NHIF package. Awareness was highest for cancer care (76.2%) and lowest for renal dialysis (34.7%). This gap directly impacts utilization; members unaware of their entitlements may not seek care or may pay out-of-pocket unnecessarily. The primary channel for learning about benefits was through friends (40%), while only 4.9% received information directly from NHIF staff, indicating a failure of formal communication strategies.

4.4 Access to Entitlements

Over half (54.2%) of respondents reported that NHIF benefits were not available when needed at accredited facilities, citing absent diagnostic services, stock-outs of medicines, and demands for informal co-payments. On affordability, while 78.1% of enrolled members found the KES 500 monthly premium "adequate" or "average," hidden costs — for drugs or tests not available under the scheme — created a significant financial burden, leading to dissatisfaction. On acceptability, most respondents reported positive interactions with healthcare providers, with 79.2% feeling they were "received well"; however, 47.1% reported unacceptably long waiting times, negatively impacting the overall experience.

5.0 Discussion

The study demonstrates that the determinants of enrollment and retention in NHIF among the informal sector are multifaceted, extending beyond the common focus on premium affordability. While socio-demographic factors create a baseline for enrollment, the findings suggest that knowledge and access are the pivotal factors influencing sustained membership.

The severe knowledge gap (41% of benefits unknown) undermines the value proposition of the scheme. If members are unaware of what they have paid for, they cannot utilize services, leading to perceived poor value for money and eventual dropout. This is exacerbated by the reliance on informal communication channels, which are prone to misinformation.

Furthermore, the high rate of service unavailability (54.2%) points to a critical breakdown in the supply side of the health insurance contract. Members who face stock-outs or are forced to pay extra for services perceive a breach of trust, which is a powerful deterrent to retention. This aligns with the conceptual framework of access by McIntyre and Thiede (2007), which posits that effective access requires the simultaneous alignment of availability, affordability, and acceptability.

6.0 Conclusion and Policy Recommendations

This study concludes that for Kenya's NHIF to successfully enroll and retain informal sector members, a paradigm shift is required from a purely financial model to a holistic service-delivery model. The key barriers are not merely the cost of premiums but the members' knowledge of their benefits and the consistent availability of those benefits at the point of care.

Based on these findings, the following recommendations are proposed:

1. Enhance Targeted Communication: NHIF should develop and implement decentralized, face-to-face communication strategies, such as setting up information booths in informal sector hubs. Educational materials should be simplified and disseminated in local languages to improve knowledge of entitlements.
2. Strengthen Provider Monitoring and Enforcement: NHIF must rigorously monitor accredited healthcare providers to ensure compliance with service agreements. A robust feedback and grievance redress mechanism should be established to address member complaints regarding service unavailability or extra charges.
3. Explore Differentiated Premium Packages: To address the varying financial capacity within the informal sector, NHIF should consider introducing tiered benefit packages with corresponding premium levels, making the scheme more flexible and inclusive.
4. Government Subsidization: For the lowest-income segments, the government should consider subsidizing premiums to ensure that financial protection is extended to the most vulnerable, as seen in successful models like Thailand's.

By addressing these critical areas of knowledge and access, Kenya can strengthen its path toward UHC, ensuring that its social health insurance scheme effectively serves the majority of its workforce.