The Lagos State government’s quest to implement the universal health coverage goal of the National Health Insurance Authority (NHIA) Act 2022 has hit a roadblock following a standoff with private health insurers.
Health maintenance organisations (HMOs) are resisting the state’s move to outsource to them the management of Ilera-Eko, the state-owned health scheme, and impose a levy on premiums charged to enrollees.
The Lagos State Health Management Agency (LASHMA) ordered HMOs to move their clients from the organised private sector to the state’s scheme, despite an order to stay action on any regulation concerning private insurers until engagement and mutual consultations with all stakeholders are completed.
Muhammed Sambo, NHIA director-general, confirmed to BusinessDay in a text message that the much-anticipated operational guideline to implement the Act has been delayed because “the minister of health has to approve it”.
Meanwhile, President Bola Tinubu’s ministerial list is yet to be unveiled.
LASHMA is proposing that HMOs remit 13 percent of the premiums charged as “social health plan contributions” to the agency, according to a document obtained by BusinessDay. It was signed by Emmanuel Zamba, LASHMA general manager, last November.
“A minimum of N30,000 would be applied for all private health plans, and HMOs are expected to remit social health plan contributions in respect of all lives registered in Lagos State. This will therefore be 13 percent of 30,000 for all residents of Lagos State on private plans, for November and December 2022,” the document read.
“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.”
As of July 2023, about 756,000 out of the estimated 26 million residents of Lagos have been enrolled in the Ilera Eko scheme, nine years after it was launched.
It’s not clear why the starting point is not to gain the buy-in of the estimated 5.5 million people employed in the state’s informal sector, which represents more than half of the 7.5 million labour force, according to data from the International Monetary Fund and the World Bank.
However, the decision has unsettled the HMO industry mainly because the state has started implementing the Act before the release of the official operational guidelines.
Stakeholders are also disappointed about the lack of a robust engagement with those primarily affected, from insurance providers to enrollees, who are the end-users of this service.
“It is not for the NHIA to declare it is time to domesticate the Act. They cannot flag off a scheme they did not initiate. If this continues to go on, you will have 36 different interpretations of the law,” Leke Oshunniyi, chairman of Health and Managed Care Association of Nigeria (HMCAN), said in an exclusive interview.
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According to him, the expectation is that NHIA should agree with states on how the scheme should run and establish harmonised premiums.
HMOs ultimately want to carry on their businesses without severing ties with the over three million client base in the formal sector. A few have unveiled complementary packages for enrollees looking to retain their private plans after the mandatory insurance fully takes off.
The Nigeria Employers’ Consultative Association (NECA) has also urged the state to wait for the NHIA guideline to enable seamless implementation of the Act and for companies to gain a clearer view of how to embrace it.
Asked if there would likely be a situation where employers abandon private insurance plans for employers and embrace the mandatory national health scheme or have both plans, Adewale Smatt-Oyerinde, NECA director-general, said the decision of many employers will be shaped by the outcome of the NHIA regulation, noting that it will be too early to postulate on what exactly will happen.
“While we note the LASHMA role and the law establishing it, it does not supersede neither can it override the NHIA. The Authority had advised all stakeholders, including LASHMA, to hold on for the NHIA regulation to be released to guide the operationalisation of the Health Insurance Scheme. Therefore, the purported directive by the LASHMA as regards Ilera Eko is premature and of no effect, in view of the advice by the NHIA,” he said.
New order
HMOs had the liberty to provide basic minimum packages to their enrollees before the reviewed Act came into force.
But with the current order, they are limited to providing supplementary services. They can also act as third-party administrators to facilitate the implementation of state health schemes when contracted or they perform functions required by the NHIA.
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.
The Act, subsection 1 and 2 of section 14, has made it mandatory for all residents in Nigeria to obtain health insurance. Employers and employees in the public and private sectors and informal sector employees must obtain insurance.
The NHIA itself is to provide coverage for employees of ministries, departments, and agencies in the Federal Civil Service and Other relevant groups.
A vulnerable group fund has been established to cater to the coverage of indigents.
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