In February 2023, the Director General of the National Health Insurance Authority (NHIA), Professor Mohammed Sambo, inaugurated a committee to develop the NHIA Operational Guidelines. As the committee works to meet the 4-week deadline they have been given, here are learnings from Ghana and Rwanda's health financing mechanisms they can leverage to develop the guidelines and address the gaps in achieving UHC in Nigeria.
Financial risk protection -- ensuring that all people have access to quality health services without financial hardship -- is critical to achieving Universal Health Coverage (UHC). However, despite initiatives designed to protect Nigerians from financial hardship, first the National Health Insurance Scheme (NHIS) in 2005 and then the National Health Insurance Authority (NHIA) Act in 2022, a survey by NOIPolls revealed that 80% of adults pay for their health out-of-pocket, and only 17% have health insurance cover.
Health Insurance in Nigeria based on the NOIPolls survey
Out-of-pocket (OOP) health expenditure can cause financial hardship by forcing people into an 'either/or' situation in which they are forced to choose between health expenditure and another equally important need. According to a further breakdown of the NOIPoll's survey, of the 80% of the adults who pay OOP for their health expenditure, 57% are willing to pay money monthly or yearly for health insurance. Similarly, 49% stated that they were not aware of the NHIS.
These findings suggest that despite the provisions in the NHIAto provide financial hardship protection, access to health insurance may be a major issue across the country.
Health financing in Nigeria: The Journey so far
The history of health financing in Nigeria dates back to 1962, two years after Nigeria's independence. During that time, the government funded universal and free healthcare particularly in the public health facilities, using funds from general revenue, especially oil exports. Unfortunately, this was short-lived and was phased out following the global slump in oil prices in the 1980s when the government could no longer afford to fully cover the cost of care. In a bid to mitigate against the dwindling funding for healthcare, amongst other pressures, in 1999, the National Council on Health approved and signed legislation revamping the health financing model to ensure full private sector participation in what became the National Health Insurance Scheme (NHIS).
When the NHIS was launched in 2005, its goal was to ensure "universal coverage and access to adequate and affordable healthcare in order to improve the health status of Nigerians, especially for those participating in the various programmes of the Scheme". In May 2022, the NHIS legislation was replaced by the NHIA Act. Among other things, the Act makes health insurance mandatory for every Nigerian and legal resident, to promote, regulate and integrate health insurance schemes in the country. It authorises the NHIA to improve and leverage private sector participation in the provision of healthcare services.
According to the Act's provisions, all citizens are required to be covered by health insurance schemes; however, vulnerable people are exempted from contributions under health insurance. As a result, contributions will be made on their behalf by one or a combination of the three tiers of government, development partners or non-governmental organisations. The Federal Government contributes to funding for vulnerable people through the Basic Health Care Provision Fund (BHCPF).
In February 2023, nine months after the Act was signed into law, the Director General of the NHIA inaugurated a committee to develop the NHIA Operational Guidelines which will help accelerate the implementation of the NHIA Act. The committee, which has been given four weeks to complete the task, should consider incorporating lessons learned from countries such as Ghana and Rwanda, which have made significant gains in health insurance coverage and are well on their way to achieving Universal Health Coverage.
Learnings from Ghana and Rwanda
Ghana's health financing mechanism evolved from a tax-funded system prior to independence to community-based health insurance (CBHIS) in the 1990s and finally, the establishment of the National Health Insurance Scheme (NHIS) in 2003. Ghana's National Health Insurance Scheme (NHIS) was established with the goal of providing a wide range of healthcare services to Ghanaians through district mutual and private health insurance schemes, as well increasing affordability and utilisation of drugs and health services in general, and particularly among the poor and most vulnerable populations. It is financed from four sources including:
- Value-added tax on goods and services: 2.5% of which is known as the National Health Insurance Levy (NHIL) accounts for approximately 74% of revenues
- An earmarked portion of Social Security Taxes and the National Insurance Trust (SSNIT): accounts for approximately 20% of revenues
- Individual premiums account for up to 3%, while funds from investment returns and others such as parliaments and donor account for the remaining 3%
All Ghanaian residents (including non-citizens) are eligible for NHIS coverage. However, two-third of NHIS enrollees are exempted from premium payments -- for instance, SSNIT contributors, enrollees under 18 years or over 70 years as well as indigent people, institutionalised people and beneficiaries of social protection programmes may not pay premiums. As at 2021, 68.6% of the Ghanaian population were covered by either NHIS or private health insurance schemes
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Rwanda's progress is primarily linked to the successful implementation and national scale-up of CBHI for the informal sector. The CBHI has enabled Rwanda to have approximately 90% of its population covered by health insurance. Secondly, high coverage of health insurance boosted access to essential Primary Health Care services and is thought to have contributed to Rwanda's achievement of the Sustainable Development Goal three. Membership in the CBHI scheme is accessible to working-age Rwandans in the informal sector. This is made possible by a one-time contribution fee per household member and a 10% co-payment fee for all services at the healthcare facilities. This fee varies according to the household's income category.
Five lessons to consider
Ghana and Rwanda have made significant progress towards achieving universal health coverage by making healthcare services affordable and accessible to all. Nigeria could follow in their footsteps by developing policies that target the most vulnerable groups. One option is to fund health insurance at the third tier of government through co-payments for the informal sector and exploring contributing to health insurance through Value Added Tax (VAT).
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Rwanda has implemented a community-based health insurance scheme, which has significantly improved access to healthcare services in rural areas. Nigeria could learn from this model and establish community-based health insurance schemes to serve rural areas.
Ghana has partnered with private insurance companies to expand health insurance coverage, making it more affordable and accessible to the general public. Nigeria could follow suit by increasing public-private partnerships to expand health insurance coverage.
Ghana and Rwanda have both made significant investments in healthcare infrastructure in order to improve the quality of healthcare services. Nigeria could improve its healthcare infrastructure to make healthcare more accessible and affordable.
Rwanda has simplified the process of health insurance enrollment, making it easier for people to sign up. Nigeria could learn from this and simplify the process of enrolling in health insurance to increase coverage. For example, the NHIA should put in place mechanisms to exempt citizens under the age of 18 year and over 70 from paying premiums.
However, the government must first address the urgent need for increased sensitisation to educate the Nigerian people about the National Health Insurance Authority's existence, as demand generation is critical to the implementation of mandatory health insurance.
