Suppose you’re wondering why your employer has enrolled you in a government healthcare platform. In that case, the reason is simple: the mandatory insurance policy enacted by the National Health Insurance Act 2022 has taken effect.
The operational guidelines were unveiled on October 10 to enrol more than 50 million Nigerians into the National Health Insurance Scheme (NHIS) within the next two years.
Ultimately, about 198 million Nigerians will be brought into the universal health coverage net.
Over 90 percent of Nigerians are burdened by healthcare expenses, primarily paid for out-of-pocket.
“This ambitious endeavour aims to alleviate the financial burden on citizens and ensure that quality healthcare is accessible to a broader segment of the population,” the Healthcare Federation said in a statement.
What this means is that everyone working in the private or public sector must hold an NHIS basic minimum package.
It is expected that the company or corporation where you work will register you with the health insurance scheme of any state you are based.
Organisations that do not have existing plans can choose preferred health providers from a list of hospitals approved by the state health insurance authority to provide coverage.
There are usually private and public health providers on such lists.
But for companies that have existing insurance plans mostly with private health maintenance organisations, their human resources simply have to register with the state authority.
However, their access to existing private insurance plans can only continue if the state authority has outsourced the provision of service to such HMOs.
Although part of the changes effected by the act is to limit private HMOs to the provision of supplementary services, some of them can still provide basic services if they have been appointed as third-party administrators to facilitate the implementation of state health schemes.
The act stipulates that only states and the federal capital territory are empowered to provide a basic minimum package of care to cover all residents through their health insurance and contributory scheme.
In Lagos for instance, the Lagos State Health Management Agency (LASHMA) ordered HMOs to move their clients from the organised private sector to the state’s scheme in July as part of the implementation of the NHIA Act.
The proposal from LASHMA is that will HMOs will remit 13 percent of the premiums charged as “social health plan contributions” on all lives registered with the agency.
“With effect from January 2023, social health plan contributions will be charged at 13 percent of the actual premiums paid on all private plans written in each quarter and would be due by the 15th of the first month of the new quarter while late payments will attract penalties,” a document signed by Emmanuel Zamba, LASHMA general manager shows.
The same rules apply to owners of small, medium, and large-scale enterprises with five or more employees.
The NHIA itself is to provide coverage for employees of ministries, departments, and agencies in the federal civil service and other relevant groups.
Public sector employers on the federal level are to pay 3.25 percent of the contribution while employees pay 1.75 percent, jointly accounting for 5 percent of the employee’s consolidated salary.
Employers in the organised private sector are expected to pay a 10 percent contribution while employees pay five percent, which sums up to 15 percent of the employee’s basic salary.
Compared to the previous status quo, health insurance pricing will surge higher than common rates for private HMOs.
For example, an average bank manager with a basic salary of N500,000 monthly or N6 million annually will have to contribute N900,000 as 15 percent under the newly unveiled NHIA guidelines.
Such an employee would normally be entitled to a Private Health Insurance plan with a premium at current rates of between N50,000 and N150,000 yearly.
This represents a huge increase in healthcare outlay.
It is unlikely that such a person would be able to pay for a supplementary or complimentary private health insurance plan, creating an existential threat to private plans.