The document evaluates the implementation of health insurance in Nigeria, highlighting inadequate government funding and slow progress, which leads to low coverage and significant challenges for the National Health Insurance Scheme (NHIS). It outlines the need for stronger structures, creative stakeholder engagement, and rapid program uptake to enhance access and protect against financial risk. Despite its shortcomings, NHIS presents opportunities for improving healthcare access and financial protection for Nigerians if effectively managed and scaled up.

1. EVALUATION OF HEALTH INSURANCE
IMPLEMENTATION IN NIGERIA: GAINS,
CHALLENGES AND POTENTIALS
~ Dr Tarry Asoka
8th Annual General Meeting and Scientific
Conference of HEALTHCARE PROVIDERS
ASSOCIATION OF NIGERIA (HCPAN), 27th November,
2012 at the Banquet Hall, Airport Hotel, Ikeja-Lagos,
Nigeria.

2. Take Home Messages
• Government budgetary allocations (Federal/State)
to fund healthcare will continue to be inadequate
• Health Insurance as an alternative source of
funding is feasible in Nigeria, with potential to
secure universal access
• But with low coverage rate & slow progress, health
insurance programme facing many challenges
• What is needed: strengthen existing structures;
modify some areas; creative stakeholder
engagement; and facilitate rapid programme
uptake at State level

3. Introduction
• Continuous decline in public spending for health
in Nigeria, relative to the needs of a growing
population
• Although progressive increase in absolute
amount allocated to health sector by Federal
government
• But as proportion of total budget, allocation to
health ranged only between 2 and 6 % over a
twelve year period (2000 – 2011)
• Less than half of the 15 per cent target set by
African Heads of State in April, 2001 in Abuja to
fund the health sector

4. FEDERAL ALLOCATION TO HEALTH – in Relation to Total Budget & GDP
S/No. YEAR TOTAL ALLOCATION ALLOCATION TO HEALTH As % of TOTAL GDP As % of GDP
(NGN in Billion) (NGN in Billion) BUDGET (NGN in Billion)
1. 2000 745.1 15.7 2.1 4,717.33 0.3
2. 2001 1,044.2 42.6 4.1 4,909.53 0.9
3. 2002 2,294.8 44.7 1.9 7,128.20 0.6
4. 2003 2,481.9 52.2 2.1 8,742.65 0.6
5. 2004 3,182.1 59.8 1.9 11,673.60 0.5
6. 2005 2,245.3 71.7 3.2 14,735.32 0.5
7. 2006 1,900.0 106.9 5.6 18,709.79 0.6
8. 2007 2,396.6 122.9 5.1 20,874.17 0.6
9. 2008 3,966.1 143.9 3.6 24,552.78 0.6
10. 2009 3,557.7 154.6 4.3 25,102.44 0.6
11. 2010 4,427.2 164.9 3.7 30,980.84 0.5
12. 2011 4,971.9 266.7 5.4 36,123.11 0.7
Source: Budget Office of the Federation, Federal Ministry of Finance

5. Health Allocations as Percentage of Total Federal
Government Budget
Source: Budget Office of the Federation, Federal Ministry of Finance

6. Comparatively , all 6 Africa countries - which have met or
surpassed this target by 2010, are considered to be
poorer than Nigeria
Source: Africa Union Commission, 2011

7. Introduction II
• >60% of total health expenditure in Nigeria comes
out of peoples’ pockets
• Fees required to be paid at health facilities deter
large proportion of population from accessing
modern healthcare
• Typical household decision: buying medicine for a
sick child versus providing food for a day for the
entire family
• Herein Health Insurance or similar pre-paid
mechanisms - ‘ring-fenced’ from further budgetary
cuts and providing financial risk protection

8. A working definition of health insurance:
“any approach that enables people to
receive healthcare services or products
without the need to pay for such services
and products at the point of care,
becoming a barrier to access”
(Care Net Nigeria, 2011)

9. So what is the state of health insurance in
Nigeria, with particular reference to the NHIS?
 How has this system worked to reduce the financial
burden of ordinary people in accessing health care
services?
 What experience has been gained from this
programme of social protection against the financial
risk of ill-health in a vast country such as Nigeria?
 What challenges is this system being confronted with,
in doing so?
 And what practical actions should be taken to rapidly
scale-up health insurance in a way that it protects the
vast majority of the population from financial
difficulties when accessing health care services?

10. The National Health Insurance
Scheme (NHIS) in Nigeria
The Background Context
 Processes for establishment of NHIS on-going right from the
time of independence in 1960;
 Attempts by successive governments met with vigorous
opposition either from the labour unions or bickering among
health care professionals;
 Maiden Health Summit held in Abuja in 1995 give major
impetus – introduction of HMOs;
 Decree establishing the National Health Insurance Scheme
(NHIS Decree 35 of 1999) signed on May 10 of the same year;
 Formal sector programme for Federal level employees
formally took off with some incentives in 2005

11. Key NHIS Milestones
1984 - National Council on Health under the then Health Minister, Admiral Patrick Koshoni, set up a committee under
Prof. Victor Diejomaoh to advise government on the scheme. Panel recommended NHIS as a viable funding mechanism for
healthcare in the country.
1985 - Dr Emmanuel Nsan as Health Minister, set up an NHIS review committee, under Mr. L. Lijadu. Also submitted that
the scheme was viable.
1988 - Health Minister, Prof. Olukoye Ransome-Kuti set up another committee led by Dr Emmanuel Umez-Eronini to
recommend a more realistic and acceptable model for the implementation of the scheme.
1991 - The Federal Government of Nigeria signed an agreement with the United Nations Development Programme
(UNDP) and the International Labour Organisation (ILO) for the planning and implementation of the scheme.
1993 - Dr Christopher Okojie, the Health Secretary in Interim National Government (ING) presented a memorandum to the
Traditional Council (TC) asking for immediate take-off of the scheme.
1995 - Maiden Health Summit held in Abuja recommended private sector involvement with the introduction of Health
Maintenance Organisations (HMOs).
1997 - Former Head of State, Late Gen. Sanni Abacha launched the scheme on October 15th
1999 - Former Head of State, Gen. Abdulsalam Abubakar signed NHIS Decree 35 in May.
2000 - House of Representative Committee on Health of the National Assembly held a Public Hearing on NHIS between
February 21st – 24th necessitated by calls for amendments to the enabling laws (NHIS Decree No. 35 of 1999)
2001 - Extraordinary National Council on Health with NHIS as sole agenda item held in July at Port Harcourt.
2002 - Re-launch of NHIS by Mrs. Stella Obasanjo, wife of the President of the Federal republic of Nigeria (FRN) at Ijah
community, Tafa LGA, Niger State on March 22nd .
2003 - Health Minister, Prof Eyitayo Lambo commissioned a Ministerial Committee to develop a blueprint for the
revitalization of NHIS
2005 - Former President, Olusegun Obasanjo flags off the formal sector programme covering Federal Government
Employees across the country, with progressive addition of other segments of the population.
2015 Universal Coverage ??

12. NHIS Main Features:
Objectives - ensuring access to good health care
without financial hardship to families; limiting the
rise in cost of health care services etc.
Oversight responsibility - Council of NHIS - issuing
appropriate guidelines to maintain the viability of
the scheme; registering HMOs; and others
necessary or expedient for the purpose of achieving
the objectives of the scheme.
Model - Social Health Insurance; individual choice of
provider; capitation payment of providers; & HMOs

13. Health Maintenance Organizations
(HMOs) – What are these?
“insurance-based health systems that have the
responsibility for the provision of a comprehensive
package of care to an enrolled population for a
prepaid fixed fee” (Robinson and Steiner, 1998)
…an institution, company or provident association
using its administration or insurance companies to
provide health care for its clients through
associated health centres (NHIS Act).

14. HMOs expected role within NHIS
• Collect contributions from all eligible employers
and employees;
• Collect contributions from voluntary contributors;
• Render returns to the council of the NHIS;
• Contract with only health care providers approved
by the Council; and
• Ensure that contributions are banked according to
guidelines approved by Council (NHIS Act)
• But how well are they carrying out these
functions?

15. HMOs in Nigeria
• Predated the NHIS, mainly home grown &
active in major cities – Lagos, Abuja, Port
Harcourt
• Few with equity participation from foreign
entities (IFC, Insurance Companies) & Some
affiliated to commercial banks
• Persons with medical or health background are
predominant managers
• Although signed up with large employers – but
act mainly as ‘third-party administrators’ to
the public sector formal programme of NHIS

16. NHIS - Main Programmes
1. Formal Sector Social Health Insurance Programme
2. Urban Self-Employed Social Health Insurance
Programme
3. Rural Community Social Health Insurance
Programme
4. Tertiary Institutions Social Health Insurance
Programme and
5. Voluntary Participants Social Health Insurance
Programme
(2 & 3 = Community-Based Health Insurance (CBHI)

17. NHIS - Formal Sector Programme
 Employees in formal sector – public and private
 Contributory premium – 15% of worker’s basic salary
(employee 5% + employer 10%)
 Benefit package almost comprehensive, excluding only
high-cost illnesses -HIV/AIDS, only generic drugs covers
employee, spouse and 4 children under the age 18.
 For working couples, their contributions cover both and
not more than four children under the age of 18.
 For other dependants, the employee will be surcharged.
Participants can enjoy services only after a waiting period
of one month and are issued with Identity (ID) cards to
minimize fraud.
(NHIS Act)

18. Community-Based Health Insurance
(CBHI) in Nigeria
• Framework developed by NHIS
• Several pilots with variable levels of success
• Notable ones include: donor funded
programmes in Lagos and Kwara (PharmAccess)
and Lagos State sponsored scheme
• Have major challenges in scaling-up
• Renewed interest to scale-up across the country
by NHIS, donors, and others
• But are we taking on board lessons learnt?

19. CBHI in Nigeria II
• Promoting solidarity among poor people
was seen to be counter productive
- weak economic based does not allow for creation of sufficient
‘pooled capital’ to meet recurrent needs
• Has undertaken on a large-scale that can reach significant
proportion of the poor.
- multiple schemes but one major pooled fund
• Also confronted by the same issues as those of more
sophisticated social or private health insurance schemes
• – building up adequate reserves, health plans being informed
purchasers, consumer education, re-insurance etc. not
sustainable
• Not sustainable unless there is some external back up or
support either from government or international donor on a
long-term basis.

20. NHIS - Main Achievements
• Prof of concept – notion of health insurance tested
and found to be feasible
• Enrolee benefits – little or no out-pocket payments
and enhanced patient -experience
• Provider Innovation – IT and better health
information systems
• Increased provider working capital – upfront
capitation payments retained at health centres
• Significant political will and commitment at
Federal level – massive initial cash injection, Debt
relief funds, regular funding with the Health Bill

21. NHIS – Core Operational Issues
• Extremely low coverage rate – just about 5 million
out of a total pop. of 100 million (5%)
• Fragmentation of funding pools – different
programmes operate independently of each other –
no cross subsidisation
• Stakeholders issues that remain unresolved – States
not fully engaged; informal sector workers and rural
dwellers feel left out; 2° & 3° facilities accredited as
primary care providers; complain of high handedness
of HMOs by GPs; many HMOs only act as ‘third party
administrators; NHIS Council assumed several
functions assigned to others

22. NHIS – Key Challenges
• Health Insurance Funds
- there are none, so no gathering of payments into a
resource pool before the sharing of risks
• Capacity Issues
- organizational capacity in management of an
insurance-based health care service lacking at all
levels of operation
• Institutional Arrangements
- unresolved ambiguity between the roles and
responsibilities of the major players despite legal
framework and guidelines

23. NHIS – Key Challenges II
• Stakeholder Disenfranchisement
- State governments even with considerable
resources and autonomy have no assigned role in
the scheme
• Micro Management and Poor Regulatory
Oversight
- Council of NHIS tends to do what other actors are
meant to do and so poorly performs its assigned
duties

24. NHIS – Way Forward
• Re-orientate stakeholders to understand the
National Health Insurance Scheme as a
‘system’ rather than as an ‘institution’
• Reposition the Council of NHIS as the overseer
of this system, away from implementation
• Decentralize the governance structure of the
system to give the States some responsibilities

25. NHIS – Way Forward II
• Allow various models of social health protection
to flourish within the system, including demand-
side financing approaches such as vouchers
• Coordinate the pooling and allocation of funds,
including those from external donors
• Design and market better health insurance
products with the aim of making them simple
and ‘culturally acceptable’ – learning from the
“Nollywood Paradigm’

26. Meanwhile…
…what are we
asking people
to buy?

27. Conclusion
• Huge expectation from NHIS despite its failings
• But unlike traditional insurance, health
insurance is about service delivery and rather
than paying to compensate for loss
• And health insurance is actually a financial
instrument that makes service delivery possible
and not a health intervention
• NHIS will not solve all the financial and funding
problems of the health system in Nigeria, it has
potential to provide financial risk protection for
essential health care for all Nigerians