HEALTH INSURANCE IN NIGERIA

INTRODUCTION

There is a general apathy for insurance in Nigeria and health insurance policies is not an exception. It is reported that a paltry three (3%) of the overall population has health insurance. This is not withstanding efforts already put in place by the government at getting the citizen embrace health insurance as part of family goals.

Thus, the 2005 World health organization report puts Nigeria at number 197^th out of 200 Nations in access to health insurance care coverage. Similarly 48 years for males and 50 years for females was the country’s ranking in life expectancy. And a general ranking of 42 years for both sexes in healthy life expectancy.

Furthermore, The WHO report went on to say that about 59,000 women put at 10% die annually from pregnancy. And as well as child birth complications. Moreover, the report went on to state that the country’s health situation is so bad. Hence, it is only about 39% of births that are delivered by health care professionals.

In this piece, we shall dwell on the meaning of health insurance. And its types and benefits. As well as the efforts of the Nigerian government at encouraging the citizens to subscribe to health insurance.

WHAT IS HEALTH INSURANCE?  

Health insurance is a class of insurance policy taken out to cover the costs of medical care. It may cover the whole or a part of the risks of a person incurring medical costs. It requires the insurer to pay some cost as per limit in the insurance policy of the insured’s health care expenses in exchange for a premium. Health insurance pays for medical, dental, surgical, drugs. It equally reimburses the policyholder for expenses arising from treatment of injuries. And or may pay the health care provider directly depending on the terms of the policy. Having health insurance policy is of serious importance and should be embraced by all.

NIGERIAN LEGISLATIONS ON HEALTH INSURANCE

We shall examine some legislative efforts of the Nigerian government at improving health insurance amongst the citizens.

THE NATIONAL HEALTH INSURANCE SCHEME ACT, (NO. 35 OF 1999) CAP, N42 LFN, 2004.

The NHIS Act was established with the primary aim of ensuring access to good health care services of every Nigerian. And protecting Nigerian families from hardship of huge financial medical bills. As well as other matters. The scheme was established to operate as a formal sector health insurance Program. It is a sort of social health security system, where for instance, the expenses of health care of an Employee is catered for with contributions from himself and his Employer. The scheme covers employees in the formal sector (public and organized private sectors). And every employer who has a minimum of ten (10) employees may, together with every person in his employment, pay contributions under the scheme, at such rate and in such manner as maybe determined from time to time by the council. See section 16 of the NHIS Act.

Similarly, the Act section 16(2) went further to mandate all employers to cause to be deducted from his employer’s wages the agreed amount of contribution payable by the employee and shall not by reason of the employer’s liability for any contribution or penalty made under this act, reduce, whether directly or indirectly, the remuneration or allowances of the employee in respect of whom the contribution is payable under this Act.

REGISTRATION

Furthermore, the responsibility of registration under the scheme fall on the employer. who shall collect his contributions and that of his employees and pay into the account of a designated health maintenance organization from time to time. And in consonance with the guidelines of the Council.

Pursuant to section 17(3) of the Act, any person not liable for contribution, may apply to be registered as a voluntary Contributor under the scheme. And shall after the registration, be liable to pay the specified contribution under this Act. Consequently, he shall be entitled to the health services referred to in section 18(1) of the Act. 

OBJECTIVES OF THE SCHEME

The objective of the scheme is stated in PART II (section 5) and it provides thus:

“The objectives of this scheme shall be to-

1. Ensure that every Nigerian has access to good health care services;
2. Protect families from the financial hardship of huge medical bills ;
3. Limit the rise in the cost of health care services;
4. Ensure equitable distribution of health care costs among different income groups;
5. Maintain high standard of health care delivery services within the scheme;
6. Ensure efficiency in health care services;
7. Improve and harness private sector participation in the provision of health care services;
8. Ensure adequate distribution of health facilities within the federation;
9. Ensure equitable patronage of all levels of health care;
10. Ensure the availability of funds to the health sector for improved services.”

From the list of the objectives of the scheme, there is no doubt that it is full of lofty ones. And that a proper execution will create a robust health care insurance system for the country’s citizens.

FUCTIONS AND POWERS OF THE SCHEME

Similarly, the Act in Section 6 enumerates the functions and powers of the scheme. And states that the scheme shall be responsible for-

 “The scheme shall be responsible for-

1. Registering health maintenance organisations and health care providers under the scheme;
2. Issuing appropriate guidelines to maintain the viability of the scheme;
3. approving format of contracts proposed by the health maintenance organisations for all health care providers;
4. determining, after negotiation, capitation, and other payments due to health care  providers, by the health maintenance organisations;
5. advising the relevant bodies on inter-relationship of the scheme with other social security services;
6. the research and statistics of matters relating to the scheme;
7. advising on the continuous improvement of the quality of services provided under the scheme through guidelines issued by the standard committee under section 46 of this Act;
8. determining the remuneration and allowances of all staff of the scheme;
9. exchanging information and data with the National Health Management Information System, Nigerian Social Insurance Trust Fund, the Federal Office Of Statistics, the Central Bank Of Nigeria, Banks And Other Financial Institutions, the Federal Inland Revenue Service, the State Internal Revenue Services and other relevant bodies;
10. doing such other things as are necessary or expedient for the purpose of achieving the objectives of the scheme,”

It is observed that the functions and objectives of the scheme is carefully made in order to achieve an effective health insurance regime in Nigeria.

ITEMS COVERED UNDER THE ACT

The list of health care services provided under Section 18 of the act includes;

1. defined elements of curative care;
2. prescribed drugs and diagnostics test;
3. maternity care for up to four live births for every insured person;
4. preventive care, including immunization, family planning, anti natal and post natal care;
5. consultation with defined range of specialists;
6. hospital care in a public or private hospital in a standard ward during a stated duration of a stay for physical or mental disorder;
7. eye examination and care, excluding test and the actual provision of spectacles; and
8. a range of prosthesis and dental care as defined

NATIONAL HEALTH INSURANCE AUTHORITY ACT, 2022

This legislation repealed the National Health Insurance Scheme Act, Cap. N42, LFN, 2004 to provide for the promotion, regulation and integration of Health Insurance Schemes and for related matters.

For many Nigerians, it could be said that this is one big step towards Universal Health Coverage in Nigeria because the Legislation has made health insurance mandatory for all Nigerians. Thus, a great percentage Nigerians who pay for health out of pocket. And are therefore put in poverty as a result, will be able to benefit from the mandatory health insurance.

We shall examine the lofty provisions of the new National Health Insurance Authority Act of 2022;

MANDATORY HEALTH INSURANCE FOR ALL

The new legislation has now made it mandatory for every Nigerian to get health insurance. The Act requires the following to subscribe to health insurance:

1. All employers and employees in the public and private sectors with five staff and above
2. Informal sector employees, and
3. All other residents in Nigeria

Consequently, this represents a paradigm shift from the old Act of 200 old Act of 2004 whose only objective was;

“providing health insurance which shall entitle insured persons and their dependents the benefit of prescribed good quality and cost-effective health services”,

UPGRATE FROM A SCHEME TO AN AUTHORITY — IMPLICATIONS

The National Health Insurance Scheme Act, 2004 established a scheme whose purpose was to provide health insurance to entitled insured persons and dependents.
However, the National Health Insurance Authority Act, 2022 came as an oversight and regulatory body for  all Health Insurance Schemes. And broadly lists the roles of this Authority to include;
(a) Promote, regulate and integrate health insurance schemes;
(b) Improve and harness private sector participation in the provision of health care services; and
© Do such other things that will assist the authority in achieving Universal Health Coverage to all Nigerians.
As a way to properly integrate health insurance schemes in Nigeria, an extensive information and data management system is a prerequisite. And the law stipulates it is achievable through collaboration with other information management organizations in Nigeria and across all states.

THIRD PARTY ADMINISTRATORS

Two components of the NHIA Act of 2022 speak to Third Party Administrators. The first expands the role of Third-Party Administrators and the second restricts the actions of Health Maintenance Organizations (HMOs). Considering how HMOs are in fact TPAs, these two stipulations might seem conflicting at first glance. But we break it down a little more below.

Expanded definition of Third-Party Administrators:

First, Third Party Administrators (TPAs) are intermediaries to facilitate claims between the insurer and the insured.

The TPAs were not defined or referred to in the NHIS Act, 1999. Thus this gap meant that HMOs were the only acknowledged administrators of health insurance outside the National Scheme, limiting the efficacy of health service delivery. In the newly signed act, TPAs have expansion to include: HMOs, Mutual Health Associations and other TPAs of health insurance. TPAs by its definition under the NHIA Act of 2022 means “any organization with expertise and capability to administer all or a portion of the insurance claims process, including administration of claims, collection of premiums, enrolment and other administrative activities, which is registered by the Authority.”

Restricted scope of HMO services:

An important aspect of the new law is how it limits the scope of HMOs in comparison with the NHIS Act of 1999. The previous NHIS Act had HMOs empowered to collect and implement contributions for premiums, including payment for services to healthcare providers, investment of pooled funds not in use etc. The Act establishing the NHIA however removes fund management completely from HMOs. And places it with State Health Insurance Schemes (SHIS). Essentially, HMOs may collect contributions for premiums on behalf of SHIS subject to their engagement to do so. But must remit these funds to the SHIS who will then manage it. And or invest the funds through the NHIA.

Similarly, the new NHIA Act has put to rest the conflict of interest thatin the NHIS Act. That is where the NHIS council included a Health Maintenance Organization. This clearly stood in the way of proper regulation and monitoring of HMOs. And which ideally was part of the NHIS’ mandate, leading to allegations of abuse, monetary impropriety and fraud against the HMOs and NHIS. The new Act in no way has representatives of HMOs as part of its governing council.

In fact, it is the requirement for prospective council members to declare assets. And investment in any HMO is grounds for reconsidering such a member. This is one of the ways to promote accountability.

NHIA AS A REGULATOR, IMPLEMENTER, INVESTOR, AND INSURER

A review of the new Act shows that the NHIA has a wide range of more functions that empower the Authority to serve as regulator, implementer, investor. And insurer of health insurance practices and schemes in Nigeria.

NHIA as a Regulator

 The new Act clearly states that the NHIA is empowered to serve as Regulator of Health Insurance Schemes in the country. As we have written about copiously, many State Health Insurance Schemes have been established to provide services for residents. These needed a governing body which the NHIS is does not have power by law to provide. Thus, the NHIA will now promote, regulate and integrate all health insurance schemes in Nigeria. NHIA will also regulate, accredit and register HMOs. And other third-party administrators. Hence, it has the authority of the new Act as a licensing body, to carry out these oversight functions for TPAs.

NHIA as an Insurer

This new Act seeks to make NHIA an authority that will insure registered private health insurance companies through a security deposit that these HMOs are required to pay before registration. The essence of this insurance is to ensure that there is financial backup should a health insurance scheme or private health insurance organization run into financial trouble or out of business for any reason. and further ensure that Enrollees continue to remain insured and do not suffer financial troubles.

NHIA as an investor

This simply empowers the NHIA to invest funds not in immediate use in approved federal government securities at the discretion of the governing council.

This is to ensure sustainability of funding for health insurance schemes continues to be the goal. And it is expectation that by investing funds at the NHIA level, schemes will have a support system for funding in emergency situations.

NHIA as an Implementer 

This is one component of the new Act that did not change much from the NHIS Act, 1999. And continues to raise questions among experts. Thus, is it proper for a National Health Insurance Authority with a mandate to regulate and oversee other schemes also implement health insurance by running a scheme?

It is worthy of note that no answer to the above question in the new Act. Since the provisions only states that NHIA will establish and run a scheme that provides health insurance for all employees in Federal Service.

However, it is understandable that a separate scheme for federal employees will be more practicable owing to ease of premium contributions considering the central structure for payment of federal employees’ salaries. Thus, it is more convenient to deduct at source. However, Another alternative is to make health insurance deductions for federal employees at source. And thereafter pay them applicable State Health Insurance Schemes. This will further strengthen State Health Insurance funds. And make it seamless for the NHIA to adequately regulate Health Insurance in Nigeria.

FINANCIAL MANAGEMENT CHANGES

This new NHIA Act stipulates the creation of a new vulnerable group fund and equally retains the NHIA fund.

The Vulnerable Group Fund

The vulnerable group fund will serve to provide for;

1.Subsidized health insurance coverage for vulnerable persons and;

2.Payment of health insurance premiums for indigent and vulnerable ones

The sources of funding the above will come from;

1. The Basic Health Care Provision Fund (BHCPF);

2. Health insurance levy;

3. Special intervention fund allocated by the government;

4. Interests from investments and;

5. Other sources such as  grants, donations, gifts and contributions.

Furthermore, it shall be the responsibility of the Governing Council to manage these funds through directives to the NHIA. And shall provide a mechanism for the disbursement of monies from the fund, and develop criteria for the disbursement of subsidies to State Health Insurance Schemes, subject to the approval of the Minister of Health.

It is worthy of note that it is the discretion of the governing council to determine who the vulnerable and indigents are for the purpose of benefitting from this funds. However, those who have private health insurance are not eligible to benefit from the fund.

The NHIA Fund

Similarly, the new Act retains the NHIS fund stipulated in the 1999 NHIS Act. Hence, it provides that expenditures shall be made from this fund, including staff salaries, allowances and benefits.

And it is a further provision the NHIA shall be funded by Federal Government allocations, donors, charges from private insurance, fees, fines and commissions, gifts and contributions.

Consequently, these funds can also be invested in securities and deposits, with interests accrued back to the fund. And to ensure accountability, Proper accounts on the management of this fund will be presented to the Minister of Health not more than 6 months after the succeeding year. The NHIA also continues to enjoy exemption from tax.