NHIS set to widen health insurance funding options

Managers of the National Health Insurance Scheme (NHIS) are seeking to widen the funding option for health insurance in the country. Besides the Federal Executive Council’s (FEC) approval of NHIS collaboration with the International Finance cooperation (IFC), an arm of the World Bank, a grant of N208 million ($1.3 million) for a modified information technology (IT) systems to strengthen its operations, the agency is working out ways to make mobile phone subscribers contribute to the funding of the scheme.

If approved by the Nigerian Communications Commission (NCC) and Consumer Protections Council (CPC), mobile phone subscribers may pay one kobo per second for every call to enable the NHIS realise its 2015 universal health coverage target. The aim is to cater for those in the informal sector to have access good healthcare system.

Until now, the difficulty of paying out of pockets has placed most Nigerians in great deal of financial risk and restricts them from having direct access to healthcare when they need it as they are financed privately. Private expenditure on health as a percentage of total health expenditure is 63.3 percent with prepayment through private health insurance plans put at about 5 percent and a huge 95 percent paid out-of-pocket.

An NHIS document available to BusinessDay reveal that plans by the agency to make operators in the telecommunications sector pay a percentage of their revenue to help fund 

 health insurance was been pursued, with subscribers likely to become ultimate contributors to the scheme.

According to Abdulrahaman Sambo, executive secretary, NHIS, “We are looking at what we call one kobo per second objective. We feel that if individuals pay one kobo per second for airtime, we should be able to generate adequate resources to pay the health bills of every Nigerians. Why is it impossible or is it becoming difficult to do that? First, you look at whether it is a tax. Is it the mobile users tax or should it come from the profit of the companies? It is unlikely to come from their profit because it is their legal revenue.

“We are working to see that the contribution comes from the pocket of the consumer and not the companies. That means if a company is reducing its tariff. It should take cognisance of that one kobo per second. There has to be a law that will allow that to happen then, we will fine-tune toe collection mechanism and who should collect. Will it be the NCC or the Inland Revenue? How will it be channelled to NHIS? We are looking at the practicability and it is practical because it is done in some countries.”

The agency’s engagement with IFC involves the review of the current regulatory institutional and policy framework within the context of the objective of the NHIS and recommend wars of improvement, design and implement a robust and auditable IT platform for NHIS Health Maintenance Organisation (HMOs) and health providers that would help social health insurance scheme, review the current business practices and propose new business practices to ensure sustainability, efficiency and improve performance of the new system.

Also included is to conduct a review of long-term funding requirements and identify funding strategies including mechanisms for securing potential sources of revenue for health insurance in the country.

While universal health coverage is difficult to achieve if out-of-pocket payment is greater than 30 percent of total health expenditure, Eyitayo Lambo, former minister of health revealed that 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).

“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,” Lambo explained.

He however maintained that some issues to consider in evaluating each innovative method include administrative costs, magnitude of the potential revenue, political acceptability and whether such funds should go into Consolidated Government Revenues or be earmarked.

For K. S. Adeyemi, professor, School of Business, Covenant University, one initiative of financing health services or any social infrastructure, is the payment of tax, a variable that payers naturally want to evade, avoid or reduce to the barest minimum.

ALEXANDER CHIEJINA