• Monday, March 04, 2024
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Deepening health insurance penetration in Nigeria


Better healthcare is one basic human need that everyone craves for. In the light of this, the federal government established the National Health Insurance Scheme (NHIS) with the objective of providing universal health coverage for Nigerians.

Nine years since the take-off of the scheme, the health insurance business is confronted with series of bottlenecks with out-of-pocket payment for healthcare expenditure dominating non-food items and services bought in 2013, according to Nigerian Bureau of Statistics (NBS) and majority of Nigeria’s 160 million people without health insurance cover.

 Bottlenecks ranging from misconception and inadequate knowledge of the principle of health insurance among healthcare providers, Health Maintenance Organisation (HMO) and patient, pre-authorisation code for accessing primary healthcare, current NHIS Act, lack of awareness and innovative products, and clarity in regulatory framework is threatening the industry’s development with a minimum paid-up share capital of over N29 billion.

With the exception of Kwara, Lagos, Ogun, Ekiti, Niger, Ebonyi, other state governments are yet to adopt the National Health Insurance Scheme. Recent survey by NOI Polls Limited, a polling and research organisation in technical partnership with Gallup Organisation, USA, reveal that 8 in 10 Nigerians (79 percent) do not have access to health insurance, a development that shows that a huge market exists for Health Maintenance Organisation (HMOs) in Nigeria.

The HMO business which has experienced a boom in the last ten years (from 13 in 2000 to 66 HMOs in 2012) has become more sophisticated with monthly capitation payment processed manually by these HMOs.

Financing health services is a major challenge across the world, more so in Nigeria where a high percentage of people are excluded from basic health due to lack of access or inability to afford basic healthcare needs.  While financing health services or any social infrastructure often comes at great costs to the society, there are different workable models of financing available.

A cursory look at most developed countries and some African countries show that social security packages exist for their citizens. For instance, Ghana devotes a percentage of its Value Added Tax to its insurance scheme. Brazil, on the other hand, amended its constitution in 1988 and made health care a right and an enforceable right and compelled each tier of government to channel a percentage of its resources to the health sector. In Nigeria, such policy is non-existence.

While patients have increasingly shared in the financing of government health services through the payment of consultation charges and the purchase of drugs and other renewable items because the health institutions have inadequate government provision, several African governments have proposed the introduction or expansion of insurance-based healthcare financing, to raise additional revenue to fund the cost of healthcare provision as well as diminish financial barriers to obtaining health care at the time of illness.

Health experts believe achieving universal health coverage would be difficult to attain without expanding the fiscal space (through increasing domestic tax revenues, expanding tax base, developing social health insurance, getting debt relief.

With innovative ways of financing healthcare in Nigeria canvassed, there is need to expand contributions from large profitable companies by up-scaling and pooling together resources, more than what they are doing currently. Tax from mobile phone operators to fund healthcare is one that can be considered. For example, Gabon imposes 10 percent tax on mobile phone operators for use in healthcare of low-income groups.

Other innovations include tobacco and alcohol exercise tax which is operational in Philippines, Thailand and Indonesia, excise tax on foods that contribute to an unhealthy diet, additional levy on top of existing VAT rate as is in the case with countries like Chile and Ghana, as well as charge on lottery revenue in Philippines, etc.

We believe such policy should percolate to state, local government and community levels. Corporations whose operations contribute adverse macroeconomic externalities on national health profile should be made to bear a large portion of the risks

For the health system to deliver on its promise to the Nigerian people it has to be adequately funded and we must take the concept of democratisation to the very heart of health. Thus, the system must provide access to healthcare for all categories of Nigerians.