Audit flags gaps in Sh53bn teachers’ medical insurance scheme

Teachers across the country may have been disadvantaged under the Sh53 billion taxpayer-funded medical insurance scheme, according to findings of a recent audit.

The report by Auditor General Nancy Gathungu has flagged serious gaps in the administration of the multibillion-shilling cover.

The report for the financial year ended June 30, 2025, also reveals that public hospitals were excluded from the service providers list.

Gathungu has also flagged delays that forced teachers to pay medical bills out of pocket, putting the Teachers Service Commission on the spot.

The auditor has raised concerns over how TSC managed the Sh53.6 billion medical insurance contract.

The three-year contract, signed on November 17, 2022, was meant to provide comprehensive medical cover for 341,837 teachers.

Teachers were to be covered alongside their spouses and up to four children, making it one of the most significant welfare schemes for public servants.

The annual payments were scheduled to rise from Sh14.98 billion in the first year to Sh20.66 billion in the final year ending November 2025.

However, the audit reveals that despite the huge investment, the structure and execution of the medical scheme may have disadvantaged teachers.

“It was noted that the medical services required pre-authorisation, which took long, with teachers ending up paying to receive the service,” Gathungu said.

On the exclusion of public hospitals, the audit cites the contract’s schedule, which lists 814 healthcare providers across the country.

It was noted that the list omitted a significant number of public hospitals that many teachers would have easily accessed for affordable care.

The Auditor General has called out TSC management, saying it did not provide any explanation for the exclusion or the criteria used to select the listed facilities.

The omission effectively pushed teachers towards private and mission hospitals, which, in many cases, are more expensive or less accessible.

Teachers, especially in rural areas where public hospitals form the backbone of healthcare, were thus constrained.

Those in remote regions may have been forced to travel long distances to access approved providers or incur extra costs.

As a result, teachers were forced to pay cash to receive treatment, defeating the purpose of the insurance cover.

The findings raise accountability concerns about whether teachers received value for money from the multibillion-shilling arrangement.

With the government committing more than Sh53 billion to the scheme, expectations were high that teachers would enjoy efficient and accessible healthcare services.

Instead, the bureaucracies limited the benefits, with some teachers reportedly reverting to out-of-pocket payments despite being insured.

Teachers, on the expiry of the insurance in November 2025, were moved to the Social Health Authority (SHA) cover – christened ‘Mwalimu Cover’.

It expanded access to more than 6,000 accredited public, private and faith-based hospitals nationwide.

It is touted as having comprehensive benefits, including inpatient, outpatient, chronic disease management and rehabilitation services.

Coverage is limited based on job groups, with coverage for the principal (teacher) alongside their spouse and five children.

Despite the shift, stakeholders, including teachers’ unions, have recently raised concerns over the performance of the new scheme.

At the weekend, Knut threatened to pull out of its agreement with SHA, saying teachers have faced challenges accessing treatment.

The union also warned it could call a nationwide strike to protest the inadequacies if the government fails to address their concerns.

Knut’s counterpart, Kuppet, also raised similar concerns, even as Health CS Aden Duale defended the system as apt.

“It appears the SHA facility is not working either because hospitals are blackmailing our members. There is an outcry countrywide,” Kuppet secretary general Akello Misori said.

Misori quipped the government’s pledge was yet to be fulfilled, a situation Duale said could be attributed to the ongoing crackdown affecting some facilities.

“All the concerned facilities are involved in the theft of SHIF and Mwalimu’s cover. We have more than 6,000 facilities serving teachers,” Duale said.

The CS said Homa Bay, Bungoma, Mandera, Wajir and Kisii have been flagged for suspicious medical claims, largely from privately owned facilities.

He said since March 30, 12 facilities have been shut down over alleged fraud, with 24 currently under forensic audit and 250 under DCI probe.

“So far, 30 case files have been forwarded to the Office of the Director of Public Prosecutions, and 18 facilities are in court. In total, more than 1,000 facilities have been closed.”