Health Insurance in Nigeria: Challenges & Solutions

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In 2017, Nigeria was positioned 187 out of the 191 member nations in the World Health System Rankings.

This low ranking can be linked to the high maternal and infant mortality rate as well as the prevalence of diseases like Malaria, Tuberculosis and HIV/AIDS in the country.

One of the interventions aimed at combating this problem is the health insurance scheme.

Health Insurance in Nigeria, its Challenges and Solutions

health insurance in nigeria

Basically, health insurance is a social security system that guarantees the provision of needed health services to persons on the payment of token contributions at regular intervals.

The origin of this insurance scheme can be traced to Emperor Otto Von Bismarch of Germany who enacted a mandatory legislation on ‘sickness funds’ for workers in 1883. The scheme became important because of the increasing healthcare cost which led to the need for people to obtain health insurance to maintain access to preventive and emergency health care.

In 1999, the Federal Government established the National Health Insurance Scheme (NHIS) which is a corporate body set up under Act 35 of 1999 to improve the health of all Nigerians at an affordable cost.

The dwindling funding of healthcare and the rising cost of care resulted in the creation of a means of facilitating fair financing of health care costs through pooling and judicious utilization of financial risk protection and cost-burden sharing for people, against the high cost of health care through the institution of prepaid mechanism, prior to their falling ill.

In Africa, there have been success stories in countries like Rwanda, Kenya, Ghana and South Africa in which their national health insurance schemes reduced the burden of healthcare on the populace.

In 2005, the NHIS was officially launched and commencement of services to enrollees started in September 2005. Till date, over 4 million Identity Cards have been issued, 62 HMOs have been accredited and registered. Presently, 5,949 Healthcare Providers, 24 Banks, 5 Insurance Companies and 3 Insurance Brokers have also been accredited and registered.

The scheme has three different programmes to address different segments of the Nigerian society.

The first programme is targeted at the formal sector and it covers the federal, state and local governments, as well as the organised private sector. The armed forces, the police, other uniformed services and students of tertiary institutions are also covered by the formal sector social health insurance programme.

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The second programme is aimed at the informal sector. This programme covers the community-based social health insurance programme and the voluntary contributors’ social health insurance programme.

The third programme is a social insurance programme for the vulnerable groups which covers physically challenged persons, prison inmates, children under five years, refugees, victims of human trafficking, internally displaced persons, immigrants and pregnant women.

The mode of operation of the formal sector social health insurance programme is such that the health services of employees in the formal sector are addressed from the funds pooled by the employer and the employees. Also, specific responsibilities are expected from the healthcare facility, the health maintenance organisation and the NHIS.

The healthcare facility must be accredited with the NHIS and must abide by the operational guidelines of the NHIS. Additionally, the healthcare facility must provide the services agreed with the NHIS in the benefit package and ensure enrollees satisfaction. The healthcare facility should also report complaints to the HMO and the NHIS.

The duties of the HMO include providing an approved health insurance plan to enrollees, ensuring continuous sensitization of enrollees. Additionally, the HMO should carry out continuous quality assurance of healthcare facilities, ensure timely approval of referrals and follow up on the referrals. The HMO should also ensure timely financial payments to healthcare facilities and effect necessary returns to the NHIS.

Basically, HMO is the link between the enrollee, healthcare facility and the NHIS.

The duties of the NHIS under the formal sector social health insurance programme including setting standards for the programme and accrediting healthcare facilities and the HMO. Also, the NHIS is expected to carry out periodic reviews to determine the rates to be contributed by the government, payment rates to service providers, as well as provide technical support for the implementation of the programme. Health education, sensitisation and mobilisation are also expected from the NHIS.

The healthcare services will be provided by primary, secondary and tertiary healthcare facilities. The primary healthcare facilities are the point of first contact between individuals and healthcare facilities. They are the gatekeepers of the scheme and they provide preventive, curative and rehabilitative services when operating at optimum capacity.

The secondary healthcare facilities provide specialised services and attend to patients referred to them from the primary healthcare facilities through the HMOs. However, under situations of emergency, secondary healthcare facilities can attend to patients without necessarily informing the HMO. The tertiary healthcare facilities provide highly specialised services upon referrals from the secondary healthcare facilities through the HMOs. Employees from the public sector or private sector with staff strength of 10 or more persons are expected to enroll in the programme. The contribution of the employees to the programme depends on the earning of the employees.

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In terms of contribution to the health insurance scheme, for Federal Government agencies, the employer pays 3.25 percent while the employee pays 1.75 per cent, representing five percent of the employees consolidated salary. For agencies in other tiers of government as well as in the organised private sector, the employer pays 10 per cent while the employee pays five per cent, representing 15 per cent of the employee’s salary. In some cases, the employer may decide to pay the entire 15 percent for the employee, the employee may also make extra contributions in order to improve on the package of benefit available to them.

The waiting period during which a participant will wait for their documents to be processed before they can access healthcare services under the scheme is 90 days. The enrollee’s contributions to the scheme will cover healthcare benefit to the enrollee, one spouse and four children who are less than 18 years of age. However, if more people and children above 18 years are to be covered by the scheme, extra contributions to be determined by the NHIS will be paid. Double registration of a spouse or child is not allowed.

So far, the National Health Insurance Scheme (NHIS) has been in operation for over ten years but it seems to have failed in the realization of the objectives for which it was established. One of the lowest points of the scheme is its inability to make health care available to Nigerians at an affordable cost. Out-of-pocket payment is still very high when it comes to paying for medical expenses and this has continued to drive many families to catastrophic health expenditures and poverty.

Overall, the factors responsible for the failure of the NHIS include:

  1. Inadequate legal framework for a successful scheme
  2. Poor implementation of the Act
  3. Poor government funding of health care and the health insurance scheme
  4. Optional enrollment policy
  5. Inappropriate practices by the regulatory agency, the Health maintenance organizations and the providers
  6. Lack of political will

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