On Compulsory Health Insurance in Nigeria

The Federal Government has recently made progress in the health sector by repealing the National Health Insurance Scheme Act 2014 and enactment of the National Health Insurance Authority Act 2021. The aim of the Act is to ensure effective implementation of the National Health Insurance Policy ensuring universal health coverage in Nigeria. For decades, health sector stakeholders have called for the implementation of universal health coverage to make it mandatory for all Nigerians regardless of their status in the formal and informal sectors in any form of prepaid health insurance package. This has become necessary due to the fact that 70 per cent of Nigerians incur health expenses out of their own pocket. When citizens are not covered by any form of prepaid insurance, they are left with no choice but to pay for every health-related service incurred. Personal spending largely contributes to the poor health indicators and mortality rates in Nigeria. In a society with scarce resources and competing needs for survival, personal spending leaves families the choice of caring for their emerging health needs and meeting other basic needs such as education, food, and shelter. Compared to other countries in sub-Saharan Africa, Nigeria’s personal spending is high. Countries like Angola, Benin, Burkina Faso, Cote d’Ivoire, Gabon, Kenya and Rwanda all have lower out-of-pocket spending than Nigeria.

The average in Sub-Saharan Africa was 29.98% compared to 70.52 percent in Nigeria. With the recently signed law, 80 million vulnerable Nigerians, including the elderly, children, pregnant women and people with disabilities, are entitled to free health insurance coverage under the Vulnerable Groups Fund. Countries should enjoy these funds by creating their own mandatory health insurance system. The law also states that every person residing in Nigeria must have health insurance. Section 14(2) of the Act provides that nothing under this Act shall prevent any person resident in Nigeria from obtaining private health insurance provided that such person participates in any health system authorized by the State. The implication of this section is that health insurance is mandatory for all residents of Nigeria.

Nigerians should commend the new law given its enormous benefits. First, besides reducing out-of-pocket spending, it would be a huge resource mobilization for the health sector. The health sector has historically suffered from a scarcity of resources. Over the past ten years, Nigeria’s budgetary allocation to the health sector has ranged from 3 to 5 percent of the total national budget. Given the huge demand for health commodities, infrastructure, and human resources for primary, secondary and tertiary healthcare, the budget has been consistently low. The health sector budget also denies the Abuja declaration of 15 per cent of the total health budget. Again, Nigeria is among the countries with the lowest allocation to health in the Sub-Saharan region. The minimum allocation to health in most countries in sub-Saharan Africa is 7 percent, while some countries in Africa allocate 15 percent of their budgets to health. Prepaid insurance is a pool of funds that will aid investment in the health sector and provide much-needed health goods, infrastructure and human resources.

Second, the new law will advance the country’s achievement of Goal 3 of the Sustainable Development Goals, which seeks to promote good health and well-being for all at all ages. It will increase universal health coverage from its current proportion of less than 5 percent of the population to at least 70 percent of the population. However, for the HIA law to be effectively implemented, operational guidelines must be developed quickly. The guidance should provide basic guidance about mandatory enrollment and coverage for all citizens in any prepaid health plan. Citizens’ possession of a health insurance identity card or health insurance certificate should be considered a necessary requirement to obtain certain benefits from the government. Health facilities must be well equipped and staffed by trained medical staff who respect patients’ rights. Equipping the facilities with occupational treatments for citizens would act as an incentive for Nigerians to step into the scheme.

Recent interactions with stakeholders regarding the evolution of health insurance coverage in Sokoto state demonstrate the willingness of citizens in the formal sector to participate in the state’s prepaid health plan. The state has succeeded in enrolling citizens at risk in its health insurance system under the Fund for the provision of basic health care, but citizens in the formal sector feel neglected. The federal government must work with subnational governments to ensure that appropriate categories of people are registered under the Vulnerable Group Fund without leaving those in the formal sector behind. Stakeholders responsible for implementing the law must be open and accountable to the public. Civil society organizations should establish an accountability framework to monitor implementation of the new law.

  • Emejuiwe, Public Affairs Analyst, writes from Abuja

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