Health insurance in Africa: Strategies to close the huge gap

Health insurance is essential to reduce the financial burden of purchasing healthcare by pooling funds and sharing the risk of unexpected health events. Risk sharing mechanisms are particularly important in sub-Saharan Africa (SSA) where most countries dedicate insufficient resources to healthcare and most healthcare, including medicines, are financed out-of-pocket.

In Africa, 27 out of 48 countries are significantly affected by direct out-of-pocket payments (OOPs) for healthcare services. The WHO Regional Committee for Africa has adopted a regional health financing strategy that recommends the development of prepayment schemes to expand health insurance coverage and reduce out-of-pocket payments.

Closing this gap in access to health insurance is critical to achieve the goal of UHC, which is to ensure that everyone has access to high-quality healthcare services that they need, without the risk of financial ruin or impoverishment

Why is health insurance important?

The benefits of adequate and sustainable health insurance coverage in Africa are numerous. They include improving the availability and affordability of essential medicines; increasing access to care and protecting households from the detrimental economic effects of ill-health; providing coverage for in-patient care to mitigate sudden huge financial burden due to hospitalisation; ensuring greater access to essential medicines and providing an incentive for appropriate use; and advancing towards universal health coverage (UHC).

Unfortunately, in Africa, there is significant inequity in access to health insurance, with formal workers and the rich having more access than informal workers, the poor and vulnerable groups. Closing this gap in access to health insurance is critical to achieve the goal of UHC, which is to ensure that everyone has access to high-quality healthcare services that they need, without the risk of financial ruin or impoverishment.

National Health Insurance Scheme (NHIS): A model for achieving wider and equitable health insurance coverage in Africa

A recent study revealed that although health insurance in SSA is highly inequitable, a significant proportion of the inequity lies in private forms of health insurance as opposed to publicly owned health insurance schemes. Private health insurance schemes that require individuals to make contributions in order to access benefits, select for higher socioeconomic individuals and hence promote inequality.

Comparing 36 SSA countries, the study showed that top three countries with the highest health insurance coverage and the least inequity are Rwanda, Ghana and Gabon. These three countries all have publicly owned health insurance systems that are significantly tax funded, as opposed to dependence on voluntary contributions.

It is evident that SSA countries will not achieve the desired health insurance coverage and hence UHC using health insurance that is de facto voluntary as a health financing scheme. African countries must adopt publicly owned national health insurance schemes that take into consideration the poor and vulnerable groups.

Case studies: Rwanda and Ghana

Other African countries can learn from the few countries on the continent that have rapidly increased their health insurance coverage and are characterised by less inequity in health insurance coverage. In Rwanda, the community-based health insurance (CBHI) is centrally managed by a national government agency, and is mandatory for all members of the informal sector and covers over three-quarters of the country’s population.

Under the scheme, all poor people receive full government subsidies, while some informal sector individuals receive partial subsidies. The scheme is significantly financed by non-contributory mechanisms (donor funding and general taxes).

Ghana has one of the most advanced healthcare systems in Africa due to its public insurance system, known as the National Health Insurance Scheme (NHIS). Prior to the public insurance system, Ghana used a ‘cash and carry’ scheme that required payment for any treatment upfront, which prevented many people from accessing care.

The rate of health insurance in Ghana is one of the highest in Africa, making the country one of the best on the continent, in terms of its universal healthcare system.

As of 2021, nearly 70% of Ghana had health insurance coverage. Ghana’s NHIS is predominantly funded by a combination of government allocation from general tax revenues and an earmarked tax (2.5% of value-added tax and 2.5 percent of social security contributions).

Nigeria makes efforts towards better health insurance coverage

Nigeria has been making significant efforts on its journey to UHC. In May 2022, a new National Health Insurance Authority (NHIA) Act was signed into law. This Act makes health insurance mandatory for all Nigerians.

It establishes and empowers the NHIA to ensure provision of health insurance for all Nigerians through a mandatory mechanism in collaboration with state health insurance agencies. This could mean that over 70% of Nigerians who pay for health out-of-pocket, many of whom are thrown into poverty as a result could benefit from national level mandatory health insurance.

Read also: 5 charts showing FG’s basic healthcare fund allocation in 2022

A critical point to note is that the NHIA Act stipulates the creation of a new vulnerable group fund. The vulnerable group fund will provide for the subsidy of health insurance coverage for vulnerable persons and the payment of health insurance premiums for indigents. Hence, community members in the informal sector and vulnerable groups will enjoy health insurance coverage.


In view of these, it is evident that health insurance in Africa is still evolving. Learning lessons from countries like Rwanda and Ghana, other African countries need to adopt the NHIS and ensure wider and equitable health insurance coverage in their respective countries, as this is a non-negotiable pathway towards achieving UHC on the continent.

Anyakora is the CEO of Bloom Public Health and a public health expert and

Odibeli is a pharmacist and the research and communications coordinator at Bloom Public Health

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