NHIS and NHIA

LIST OF ABBREVIATIONS

• CBHI – Community Based Health Insurance
• FSSHIP – Formal Sector Social Health Insurance Programme
• HMO – Health Maintenance Organization
• LMIC – Low- and Middle- Income Countries
• NGO – Non-Governmental Organization
• NHIS – National Health Insurance Scheme
• NHS – National Health Service
• OOP – Out-of-Pocket Payment
• SDG – Sustainable Development Goals
• TISHIP – Tertiary Institutions Social Health Insurance Programme
• UHC – Universal Health Coverage
• WHO – World Health Organization
• NHIA - National Health Insurance Act

DEFINITION OF TERMS

• Universal coverage – The desired outcome of health system performance whereby all people who need health services (promotion, prevention, treatment, rehabilitation, and palliation) receive them, without undue financial hardship.
• Health insurance – A system of advance financing of health expenditure through contributions, premiums, or taxes paid into a common pool to pay for all or part of health services specified by a policy or plan.
• Health Maintenance Organization – These are limited liability companies which may be formed by private or public establishments or individuals, that are registered by the health insurance scheme to facilitate the provision of health care benefits to contributors.
• Capitation – A payment mechanism whereby a fixed amount of money is paid per member of a defined population, to healthcare providers.
• Fee-for-service – A payment mechanism whereby providers receive a specific amount of money for each service provided.
• Premium – The amount charged by the insurer for a particular health insurance plan.
• Deductible – A fixed amount of a health care charge that the insured must pay before the insurer begins payment for all or part of the remainder of the costs.
• Co-payment – A specified amount the insured must pay for each received service that can vary by service.
• Co-insurance – The percentage of a medical bill that the insured must pay, after deductibles and co-payments are met.
• Out-of-pocket payment – Direct payments made by individuals to healthcare providers at the time of service use.
• Catastrophic health expenditure – Out-of-pocket spending for health care that exceeds a certain proportion of a household’s income with the consequence that households suffer the burden of disease.

Health care is a basic human need and a fundamental human right.

Quality health care comes at a cost to both the providers and the consumers.

Health care financing deals with the issues related to meeting these financial costs.

At least 400 million people worldwide do not have access to one or more essential health services and 6% of people in low- and middle-income countries are tipped into or pushed further into extreme poverty because of health spending. (WHO and World Bank Group, 2015).

All countries can and should do more to improve health outcomes and tackle poverty by increasing coverage of health services and reducing the suffering associated with direct payment for health services.

Among the sustainable development goals is goal 3 which is to ensure healthy lives and promote well-being for all at all ages with one of the targets being:

• Target 3.8 Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality, and affordable essential medicines and vaccines for all.

FUNCTIONS OF HEALTHCARE FINANCING

There are three main functions of healthcare financing.

• Resource mobilization
• Risk pooling
• Resource allocation

Resource Mobilization

GENERAL TAX REVENUE

This comprises all taxes that feed into the budget of the country.

• Import and export taxes
• Taxes on business transactions and profits
• Earmarked taxes

INSURANCE SCHEMES

These are arrangements which enable prospective consumers of healthcare to make advance payments (premiums) which in the event of future illness will pay the healthcare providers for all or some of the expenses incurred by the consumer. Health insurance could either be social or private.

SOCIAL HEALTH INSURANCE

Social health insurance is a mandatory scheme in which everyone in a particular group has to enroll and pay a specified premium and is then entitled to specified benefits.

PRIVATE HEALTH INSURANCE

In a private insurance scheme, buyers voluntarily purchase insurance coverage from private, independent, competitive, for-profit or not-for-profit insurance companies.

COMMUNITY FINANCING

It is a system whereby members of a community make contributions to fund their healthcare. In communities with a largely informal workforce e.g. rural areas, community financing can be employed as a preferred method of healthcare financing.

OUT-OF-POCKET PAYMENTS AND USER FEES

Out-of-pocket payments (OOP) are payments by patients directly to health service providers that are not reimbursable by an insurance scheme. User fees are a subcomponent of OOP and refer to payments when these are made for services provided by the public sector.

EXTERNAL SOURCES/DONOR FUNDS

Many poor countries rely significantly on foreign aid as a source of healthcare financing. External sources of finance can be from specialized agencies of the United Nations e.g. World Bank or from international non-governmental organizations e.g. Bill and Melinda Gates Foundation.

Risk Pooling

This refers to the collection and management of financial resources in a way that spreads financial risks from an individual to all pool members. All resource mobilization methods (except OOPs, user fees, and external financing) have some risk pooling built into them.

Resource Allocation

This has to do with distributing the mobilized and pooled resources to service providers. It involves deciding who to pay, what to pay, how to pay, and how much to pay. Examples of provider payment mechanisms include capitation, fee-for-service, salary, per-diem, per admission, etc.

WHAT IS UHC?

In 2005, Member States of the World Health Organization (WHO) committed to develop their health financing systems so that all people have access to services and do not suffer financial hardship paying for them. This goal was defined as universal coverage, sometimes called universal health coverage.

According to WHO, universal health coverage (UHC) means that all people and communities can use the promotive, preventive, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardship. (WHO, 2010)

UHC is firmly based on the WHO constitution of 1948 declaring health a fundamental human right and the Health for All agenda set by the Alma Ata declaration in 1978. It is also one of the targets of the Sustainable Development Goals (SDGs) and brings hope of better health and protection for the world’s poorest.

DIMENSIONS OF UNIVERSAL COVERAGE

• The breadth of coverage – What proportion of the population is covered
• The depth of coverage – Which services are covered and at what quality
• The height of coverage – How much of the cost is covered (Borghi, 2011)

ACHIEVING UNIVERSAL COVERAGE

The figure shows a hypothetical country in which about only half of the population is covered for about half of the possible services they need and only half of the cost of these services is met by the coverage mechanism. To get closer to UHC, the country would need to extend coverage to more people, offer more health services of good quality, and pay a greater part of the cost from pooled funds.

Different countries have their different health problems, health systems, and resources, and hence the path to achieving universal coverage varies from country to country. Generally speaking, however, universal coverage can be achieved either through the extension of social insurance (Bismarck model) or government provision to the whole population funded by general tax revenue (Beveridge model) or a mix of both.

Achieving universal coverage is not the prerogative of high-income countries, as many low- and middle-income countries have taken bold steps in moving closer to universal coverage.

Examples of some pro-UHC reforms implemented by some LMICs include:

• In 1994, South Africa launched free (tax-financed) services for pregnant women and children under six.
• In 2001, the universal coverage scheme in Thailand extended coverage to the entire informal sector.
• In 2006, Zambia commenced free health care for people in rural areas and extended to urban areas in 2009.
• In 2008, Nepal launched universal free health care up to district hospital level.
• In 2008 in Ghana, National Health Insurance coverage extended to all pregnant women.

In Nigeria, the National Health Insurance Scheme (NHIS) was established in 1999 with the aim of providing easy access to healthcare for all Nigerians.

THE BIG QUESTION HAS THIS AIM BEEN ACCOMPLISHED?

The National Health Insurance Scheme (NHIS) was established under Act 35 of 1999 by the Federal Government of Nigeria, with the aim of providing easy access to healthcare for all Nigerians at an affordable cost through various prepayment systems in order to improve the health status of Nigerians.

• The scheme became fully operational in June 2005 when its formal sector programme was officially flagged off.
• NHIS provides social health insurance in Nigeria where health care services of contributors are paid from the common pool of funds contributed by the participants of the Scheme.
• It also regulates private health insurance operated by HMOs.

NHIS VISION

A strong, dynamic and responsive National Health Insurance Scheme that is totally committed to securing 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/products of the Scheme. (NHIS, 2012)

NHIS MISSION

To facilitate fair-financing of healthcare costs through pooling and judicious utilization of financial resources to provide financial risk protections and cost-burden sharing for people, against high cost of healthcare, through various prepayment programmes/products prior to their falling ill. This is in addition to providing regulatory oversight to Health Maintenance Organizations and participating Healthcare Providers. (NHIS, 2012)

STAKEHOLDERS IN NHIS

• Government: Government, through the National Health Insurance Scheme, sets standards and guidelines, while protecting the rights and enforcing the obligations of all stakeholders.
• Employees: Employees regularly contribute a percentage of their basic salary in advance to guarantee them and their dependents good quality health care whenever they fall ill.
• Employers: These are public or private sector organizations that hire and pay workers, for whom they are required to pay contributions.
• Health Maintenance Organizations (HMOs): They receive contributions from eligible employers and employees and pay healthcare providers for services rendered.
• Health Care Providers: A Health Care Provider as provided for in the NHIS Act, is a licensed government or private healthcare practitioner or facility, registered by the Scheme for the provision of prescribed health benefits to contributors and their dependants. Health Care Providers can either be Primary, Secondary, or Tertiary.
• Primary Healthcare Providers: Primary Healthcare Providers serve as the first contact within the health care system, and they include:
  • Private clinics/hospitals
  • Primary Health Care Centres
  • Nursing and Maternity homes
  • Out-patient departments of General Hospitals
  • Out-patient departments of the Armed Forces, the Police and other uniformed services
  • University Medical Centres
  • Federal Staff Clinics
• Secondary and Tertiary Healthcare Providers: These include general hospitals (Out-patient and in-patient care for medical, surgical, pediatric, obstetric gynecological patients, etc), specialist hospitals, pharmacies, laboratories, dental clinics, physiotherapy clinics, radiography, etc.
• Other stakeholders: International organizations and collaborating partners, non-governmental organizations (NGOs), community leaders, the media, banks, insurance companies, insurance brokers, and professional bodies.

NHIS PROGRAMMES

• Formal Sector Social Health Insurance Programme
• Tertiary Institutions Social Health Insurance Programme
• Community Based Social Health Insurance Programme
• Voluntary Contributors Social Health Insurance Programme
• Vulnerable Group Social Health Insurance Programme

FSSHIP

The Formal Sector Social Health Insurance Programme (FSSHIP) is the most familiar programme being run by NHIS. Most of all the current health insurance enrollees in Nigeria are on the FSSHIP and are employees of the Federal Government and their dependants.

FSSHIP is a social health security system in which the health care of employees in the Formal Sector is paid for from funds created by pooling the contributions of employees and employers. The Formal Sector consists of the following: Public Sector, Organized Private Sector, Armed Forces, Police and other Uniformed Services.

Contributions: For public (Federal) sector programme, the employer pays 3.25% while the employee pays 1.75% of the employee’s consolidated salary. For the private sector programme and other tiers of Government, the employer pays 10% while the employee pays 5% representing 15% of the employee’s basic salary. (NHIS, 2012)

Payment Mechanism: NHIS pays capitation for primary care and fee-for-service upon referral to secondary or tertiary health care providers.

Scope of Coverage: The contributions paid cover health care benefits for the employee, a spouse and four (4) biological children below the age of 18 years. More dependants or children above the age of 18 are covered on the payment of additional contributions by the principal beneficiary as determined by NHIS.

Tertiary Institutions Social Health Insurance Programme (TISHIP)

This is a social security system whereby the health care of students in tertiary institutions is paid for from funds pooled through the contributions of students.

Community Based Social Health Insurance Programme (CBSHIP)

Community Based Social Health Insurance Programme (CBSHIP) is a non-profit health insurance programme for a cohesive group of households/individuals or occupation based groups, formed on the basis of the ethics of mutual aid and the collective pooling of health risks, in which members take part in its management. (NHIS, 2012)

It has been piloted on a small scale in Anambra, Lagos, and Kwara states.

Low enrolment rates greatly undermine the sustainability of CBHI as it is affected by factors such as trust by the community in the organizer or manager of the scheme, attractiveness of the benefit package, affordability of the premium, and the quality of the health care. (Onoka, et al., 2011)

There are also equity issues in CBHI, for example despite the smallness of premium paid by the enrollees in Southeast Nigeria, CBHI scheme enrolment was very low and contributions were observed to be retrogressive. (Onoka, et al., 2011)

Voluntary Contributors Social Health Insurance Programme

This programme is designed for those not covered by any of the NHIS programmes and for those who may not have been satisfied with the existing healthcare services. Membership is voluntary and open to interested individuals, families, employers of establishments with less than ten staff, self-employed persons, political office holders, retirees, foreigners, etc.

Vulnerable Group Social Health Insurance Programme

Designed to provide health care services to persons who due to their physical status (including age) cannot engage in any meaningful economic activities e.g. physically challenged persons, children under five, orphans, pregnant women, prison inmates, refugees and internally displaced persons.

• POPULATION COVERAGE: Only 4 – 5% of Nigerians are covered, largely Federal Government employees. (Uzochukwu, et al., 2015)
• SERVICE COVERAGE: There are a number of conditions that are either partially or totally excluded from the benefit packages of the scheme e.g. occupational injuries, epidemics, family planning commodities, etc.
• COST COVERAGE: Individuals under NHIS still have to make some out-of-pocket payments – in the form of a 10% co-insurance for drugs.

Challenges

• Non-mandatory nature
• Misconceptions on health insurance due to religious beliefs, tradition, etc.
• Inadequate financing
• Weak governance
• Corruption
• Inadequate infrastructure
• Inadequate services
• Poor service quality
• Poverty and insufficient risk pooling

Recommendations

TO THE GOVERNMENT

• The scheme should be made mandatory.
• There should be an improved system of accountability at all levels.
• There should be general enlightenment and orientation on the benefits of health insurance via different media – electronic media, print media, social media, etc.
• Alternative means of funding e.g. public-private partnerships should be explored further.
• The Federal Government should increase the percentage of its budget on health and strive towards meeting the Abuja Declaration of 15%.
• Community mobilization and participation should be encouraged.
• There should be training and retraining of health care providers on the need to improve quality of services.
• Government should place more incentives for healthcare workers in rural areas.

TO LABOUR AND TRADE UNIONS

• They should allow their members to resume contributions towards the scheme.
• They should play a more active role in monitoring the scheme.

National Health Insurance Act (NHIA) 2022 Overview

Introduction: Signed into law on May 19th, 2022, NHIA replaces the ineffective National Health Insurance Scheme Act of 1999.

Objectives: NHIA aims to promote, regulate, and integrate health insurance schemes in Nigeria, ensuring mandatory health insurance for all Nigerians and legal residents. It establishes a fund to subsidize health insurance for vulnerable groups and covers premiums for indigents.

Current Healthcare Landscape: Despite 70% of Nigerians relying on out-of-pocket payments, only 3% have health insurance. NHIA addresses this gap, offering hope to over 83 million Nigerians living in poverty.

Impact and Benefits: Inclusion of vulnerable groups is expected to improve health-seeking behavior and access to quality healthcare. However, there's a need for a clear definition of who qualifies as vulnerable.

Implementation Strategies and Expected Impact of NHIA

Creation of Health Insurance Schemes and Accreditation of Healthcare Facilities

• NHIA will establish health insurance schemes in states lacking them.
• Primary and secondary healthcare facilities will be accredited for accessibility.
• These facilities, primarily government-owned, play a crucial role in achieving Universal Health Coverage (UHC).

Role of Healthcare Facilities

• These facilities provide comprehensive care including disease prevention, promotion, and maintenance.
• They offer basic diagnostic tests, safe medicines, and vaccines, contributing to UHC attainment.

Expected Impact

• NHIA has the potential to increase life expectancy, spur economic growth, and create jobs.
• It will alleviate financial burden on vulnerable populations, promoting health-seeking behavior and reducing self-medication.
• Expected decrease in mortality from preventable diseases.

Challenges and Recommendations

• Government and partners should enhance capacities of existing facilities in terms of workforce, equipment, and quality of services.
• Centralization of health information through technology will aid in planning and program implementation.

Ensuring Sustainability

• Sustainable funding is crucial for NHIA's success.
• Private sector compliance in enrolling workers is essential.
• Sustained public awareness campaigns, particularly on inclusion of vulnerable populations, are necessary.

Improvement in quality and efficiency of health services is vital for realizing NHIA benefits. Full implementation of NHIA will propel Nigeria towards achieving universal health coverage and health security.