Two decades later, Nigeria’s health insurance is still flailing

Ilorin, Nigeria – These days, Saidat Olatunji is faced with the dilemma of choosing between her stomach and her sight. A small vial of an eye drop, the 64-year-old petty trader’s glaucoma medication, barely lasts a month and costs 6,000 naira ($14.38), enough to make at least two small pots of soup for her and her grandson to eat for a week.

Unwilling to starve, she has often chosen to go without the medication, leading to inevitable consequences.

“I am increasingly losing my sight and I’ve been told I’ll need surgery soon,” she told Al Jazeera. “I’ve been told to come to book the surgery when I have the money but I don’t know when that will be.”

Nigeria’s healthcare sector is notoriously inefficient. For years, politicians and technocrats have spoken of the need for nationwide health coverage as a public service, but the advance towards that goal has been slow and stunted.

Recurrent strikes and increasing migration of trained personnel overseas have depleted the quality of health service delivery. And the dearth of infrastructure in public hospitals and healthcare centres has made things worse.

Many Nigerians are also unable to afford the low public health costs in a country where more than a third of the estimated 180 million people live in extreme poverty. To alleviate huge out-of-pocket spending in healthcare, the Nigerian Health Insurance Scheme (NHIS) was established in 1999 and became operational six years later.

Almost two decades later, subscription to the NHIS has remained low. According to a recent a statement by Nasir Sambo, its executive secretary, the scheme presently covers less than 10 percent of Nigerians – most of whom are federal employees and their dependents.

Experts say the setbacks are mostly due to a number of factors including a lack of political willpower to implement needed changes and little or no awareness for rural dwellers. Olatunji, for example, who lives in the Adangba community of Ilorin, has always seen it as an option available to only civil servants.

Last December, President Muhammadu Buhari signed a 17 trillion naira ($41bn) budget, but just 4.2 percent was allocated to the health sector. While it is a minimal increase compared with the 4.18% allocated in the previous year’s budget, it is still significantly less than the budgetary commitment agreed on in the 2001 Abuja Declaration [PDF].

The declaration was a pledge made by members of the African Union members to allocate at least 15% of their countries’ annual budget to health in April 2001 – to mobilise more resources to address tropical health challenges on the continent.

With a Lassa fever outbreak in a number of states and the country still in the throes of a COVID-19 pandemic, Nigeria has been largely reliant on international donor funding to the tune of billions, but even that barely caters to the needs of the health sector.

Adelaja Abereoran, general manager for one of the NHIS zones in central Nigeria, told Al Jazeera that the scheme is working with the authorities to make health insurance mandatory by law. “We believe that once it becomes mandatory, practically everybody will be dragged into the system,” he said.

But he also blamed cultural beliefs for the low acceptance, saying patients see trust in science as a lack of faith in divine intervention.

“If you have faith in God and you believe that God can heal you, [then] why do you have to pay for something that may not occur?” he asked.

Poor service delivery

By contrast, the private health insurance industry seems to be flourishing even though there is still a huge market for the taking.

More than 70% of Nigerians are still uninsured, especially those in the informal sector and rural dwellers, for whom paying out of pocket for their health needs seems like the only option available.

Currently, there are more than 60 accredited private Health Management Organisations (HMOs) which offer insurance services – all at higher premiums than that of the NHIS. These are largely bought by private companies for their employees partly because of the accompanying perks but also because of a fundamental distrust of public services.

Adeyinka Shittu, policy officer at the Private Sector Health Alliance of Nigeria, a business-led advocacy group for better healthcare nationwide, told Al Jazeera that public healthcare lacks basic competitive advantages that have made its private counterparts appealing.

For instance, private HMOs tend to have more comprehensive service coverage while NHIS mainly caters to priority diseases and limited diagnostic tests. Extra perks include air ambulance services, extended in-patient care, and infertility treatment.

Additionally, healthcare providers see HMOs as having smoother administrative procedures, often missing at government facilities.

“There’s this discrimination that goes on in some facilities,” Shittu said. “A hospital is more likely to trust that a private HMO would be more responsive in paying for the services that their enrollees have accessed rather than the NHIS considering the bureaucracy they have to go through [there].”

A rusty model

Industry stakeholders also say politicians and administrators have barely done much to make state-run health insurance sustainable.

“To them, once they can get the health insurance bill signed and announce that there’s health insurance, they are good,” said Shittu. “According to the WHO, for health insurance schemes to succeed, it is supposed to be mandatory. That is a little clause that has been overlooked over time.”

Unlike the government, private firms mostly target large corporations such as banks and oil companies. “That’s where a lot of their clientele is based because those companies are mandated to have health insurance cover once they’ve gone past ten employees,” Ikpeme Neto, founder of WellaHealth, a health insurance startup. “That’s what’s driving their market.”

For the private firms, creating affordable plans for demographics yet to embrace health insurance and earmarking a marketing budget for that, seems too risky a model. So, favouring profit over reach, they also ignore the informal sector.

Nevertheless, the effect of the low coverage tends to be macroeconomic as research [PDF] has shown that higher coverage rates translate to higher socioeconomic productivity.

Since the NHIS typically disburses funds to healthcare providers through accredited HMOs,  a low number of insured entities translates to a low funding pool and correspondingly fewer resources to be disbursed.

“HMOs traditionally owe a lot of facilities and even beyond owing, the reimbursement rates are quite low,” said Neto. “These low fees are also a function of lack of penetration.”

There have been instances where healthcare services have been refused to the insured despite being regular with their payments.  A way out, Neto suggests, is to get the NHIS out of being players in the system, keep them as regulators alone and then grow the market to attract a larger pool of funds.

Bridging the gap

In trying to bridge the coverage gap, the NHIS has continually rolled out new ways to register more people.

Last February, the scheme launched a collaboration with the National Youth Service Corps’s mandatory one-year national service programme for recent graduates of tertiary institutions, to provide insurance for them.

Abereoran, the manager who oversees Kwara, Kogi and Niger states – approximately half of central Nigeria – said the NHIS was promoting a number of plans. One is a 45,000 naira ($108) annual premium payment schedule that covers as many as three biological relations of the subscriber. Another allows members of state and federal parliament pay for groups of people within their constituencies.

Yet, many primary healthcare centres, ideally the first port of call for low-income groups, are still not on the accredited healthcare providers list due to ineligibility. But even before the NHIS gets its own new lease on life, locals are hoping that they can get theirs.

“I don’t mind paying in instalments after,” said Olatunji who hopes the NHIS community-based scheme will cover her surgery. “As long as I don’t lose my sight.”