Poor Health Services Amid Nigerians’ Right Under National Insurance Act

Healthcare delivery in Nigeria has faced major challenges toward achieving universal health coverage. While significant progress was made in the first two decades after the country’s independence in 1960, the economic downturn resulting from the plummeting of oil price of which Nigeria was dependent led to a series of twists and turns in the health sector. Health policies were subsequently influenced by external forces, and the adoption of the structural adjustment programme signaled a shift from a predominantly welfare scheme to the introduction of user fee and the resultant proliferation of private healthcare provision.

In recent times, since 2006, the Nigerian Government developed the National Health Promotion Policy (NHPP) to strengthen the health promotion capacity of the national health system to deliver health care that is promotive, protective, preventive, restorative and rehabilitative to every citizen of the country.

The vision of the NHPP is universal health coverage for all Nigerians. The mission is to provide stakeholders in health with a comprehensive framework for harnessing all resources for health development towards the achievement of UHC as encapsulated in the National Health Act in tandem with the SDGs.

In improving access to quality healthcare services, the World Health Assembly in 2005 has increasingly called for countries to prioritise universal health coverage. This remains a viable means of providing appropriate promotive, preventive, curative, and rehabilitative services at an affordable cost for all.

In Nigeria, the challenge of UHC is critical most especially in ensuring financial protection and access to needed health care for those outside the formal sector. This is due to constrained tax revenue in the country, equity, and efficiency problems associated with contributory schemes for the informal sector. The burden of health expenditures is mostly attributed to common endemic diseases; they constitute a majority of the public health problems because of their recurrent nature and are the major causes of death.

The high level of out-of-pocket spending and paucity of insurance mechanisms to pool and manage risk form a major challenge to health care financing in Nigeria. Poor financial capacity of consumers to pay for needed health services results in inequitable access to health care. This has limited many Nigerians from accessing the needed healthcare services resulting in loss of productivity, poverty, poor health outcomes, and preventable deaths.

As a measure to address upturn these trends, the Centre for Social Justice (CSJ) Nigeria with the support from the Strengthening Civic Advocacy and Local Engagement programme of the United States Agency for International Development (USAID-SCALE) has been working to improve the realisation of the right to health in Nigeria since the beginning of this year.

It is commendable that the Nigerian President, Muhammadu Buhari, signed into law an Act to repeal the National Health Insurance Scheme Act of 1999 and establish the National Health Insurance Authority.

According to the Nigerian Health Watch, the new law is one big step towards Universal Health Coverage in Nigeria because through the Act health insurance is now mandatory for all Nigerians. This could mean that over 70% of Nigerians who pay for health out of pocket, many of whom are thrown into poverty as a result could benefit from national level mandatory health insurance.

There are very laudable provisions in the new law that are worth mentioning. First, every Nigerian is now mandated by law to get health insurance.  Specifically, the Act requires all employers and employees in the public and private sectors with five staff and above, informal sector employees, and all other residents in Nigeria to get health insurance.

This is an improvement from the National Health Insurance Scheme Act, 1999, whose purpose was “providing health insurance which shall entitle insured persons and their dependants the benefit of prescribed good quality and cost-effective health services”, and a major step towards the achievement of Universal Health Coverage (UHC).

The NHIS Act 1999 established a scheme whose purpose was to provide health insurance to entitled insured persons and dependents.

But the National Health Insurance Authority Act, 2022 has created an oversight and regulatory body for Health Insurance Schemes and more clearly defined the roles of this authority to: (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 for all Nigerians.

One way the NHIA will likely integrate health insurance schemes in Nigeria is through an extensive information and data management system which the law stipulates should be established in collaboration with other information management organisations in Nigeria and across all states.

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 Organisations (HMOs). Considering how HMOs are in fact Third Party Administrators (TPAs), these two stipulations might seem conflicting at first glance. But we break it down a little more below.

First, Third Party Administrators are intermediaries to facilitate claims between the insurer and the insured. TPAs were not defined or referred to in the NHIS Act, 1999. 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 been expanded to include: HMOs, Mutual Health Associations and other TPAs of health insurance.

A summary of the new Act shows that the NHIA has been outfitted with a wide range of expanded functions that empower the Authority to serve as regulator, implementer, investor and insurer of health insurance practices and schemes in Nigeria.

Given continued advocacy, intense technical and public sessions and debate, the new Act clearly states that the NHIA is empowered to serve as regulator of Health Insurance Schemes in the country. Many state health insurance schemes have been established to provide services for residents. These needed a governing body that the NHIS was just not empowered 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 since it has been empowered by this new act as a licensing body to carry out these oversight functions for TPAs.

This new Act seeks to make NHIA a wholesome authority which will insure registered private health insurance companies through a security deposit that these HMOs are required to pay before registration. This function ensures that should a health insurance scheme or private health insurance organisation run into financial trouble or out of business for any reason, enrollees continue to remain insured and do not suffer financial ruin. Similar to how the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) insures banks to protect user funds.

NHIA as an investor simply empowers the NHIA to invest funds not in immediate use in approved federal government securities at the discretion of the governing council. Sustainability of funding for health insurance schemes continues to be the goal and it is expected that by investing funds at the NHIA level, schemes will have a support system for funding in emergency.

The new NHIA Act stipulates the creation of a new vulnerable group fund and retains the NHIA fund. The vulnerable group fund will be established to provide for subsidy for health insurance coverage for vulnerable persons and payment of health insurance premiums for indigents.

Just as interesting to note are the sources of this fund; the Basic Health Care Provision Fund (BHCPF), health insurance levy, special intervention fund allocated by the government, interests from investments and others — grants, donations, gifts and contributions. The telecom tax previously included in the bill was subsequently removed.

One key point to note is the need for specifications on who the vulnerable and indigents that will benefit from this fund are. While the Act says it will be determined by the Governing Council (and that those who have private health insurance are not eligible to benefit from the fund), the specifics of who they are, needs to be clarified and put in the public domain.

The new Act retains the NHIS fund stipulated in the 1999 NHIS Act. All expenditures shall be made from this fund, including staff salaries, allowances and benefits. It shall be funded by Federal Government allocations, donors, charges from private insurance, fees, fines and commissions, gifts and contributions. It can also be invested in securities and deposits, with interests accrued back to the fund. 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 be exempt from tax.

One other critical component of the Act to note is that NHIA is to undertake on its own or in collaboration with others sustained and continuous public education on health insurance. As we outline in this 2017 article, NHIA already has a ready group of collaborators in Universal Health Coverage advocates who have sustained continuous public education on health insurance across states and communities. One good example is Nigeria Health Watch’s Health4AllNaija advocacy which since 2017 has worked to drive citizens’ awareness around health insurance and its benefits to community members in various states while advocating for, and providing technical support around UHC legislation.

Ultimately, it is good to see that many of the critical recommendations made regarding the NHIS Act have been addressed in the NHIA Act. We will continue to monitor and support implementation to ensure that we achieve the right to health for all Nigerians.