Joint Learning Network for Universal Health Coverage

Nigeria: National Health Insurance System

5 million

Funding

General government revenues, Member contributions
Formal Sector, Informal Sector
Premiums

Population Covered

All populations

Service delivery system

Both Public & Non-state

Institutional structure

Centralized
Central Government, Other
Central Government
Central Government, Other
Other
Reform summary: 
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Nigeria is one of the first countries with demand driven health insurance for groups, where people can enroll for basic health insurance by forming a self-governed group of professionals, such as mechanics.As a part of the effort to strengthen the national health system, a National Health Policy (NHP) was adopted in 2006. NHP seeks to establish a realistic health financing system that has the capability of meeting health system goals of improved health status of Nigerians; financial protection of citizen against cost of illness; fair financing of health services; and responsiveness to the citizens’ expectations. This plan includes the implementation of a re-designed National Health Insurance System (NHIS).

Nigeria is one of the first countries with demand driven health insurance for groups, where people can enroll for basic health insurance by forming a self-governed group of professionals, such as mechanics.As a part of the effort to strengthen the national health system, a National Health Policy (NHP) was adopted in 2006. NHP seeks to establish a realistic health financing system that has the capability of meeting health system goals of improved health status of Nigerians; financial protection of citizen against cost of illness; fair financing of health services; and responsiveness to the citizens’ expectations. This plan includes the implementation of a re-designed National Health Insurance System (NHIS).

The broad objectives of NHIS are:

  1. To ensure that every Nigerian has access to good healthcare services
  2. To protect families from the financial hardship of huge medical bills
  3. To limit the rise in the cost of healthcare services
  4. To ensure equitable distribution of healthcare costs among different income groups
  5. To ensure a high standard of healthcare services delivered to Nigerians
  6. To ensure efficiency in healthcare services
  7. To improve and harness private sector participation in the provision of healthcare services
  8. To ensure equitable distribution of health facilities within the Federation
  9. To ensure appropriate patronage of all levels of healthcare; and
  10. To ensure the availability of funds to the health sector for improved services

Towards ensuring coverage of the different socio-economic groups in Nigeria, the NHIS has developed three major programs for this: the formal sector program; informal sector program; and vulnerable group program.

The NHIS commenced the implementation of the Formal Sector Social Health Insurance Program in 2005. The Formal Sector Program provides coverage for individuals in formal employment including public sector employees (Federal, State and Local Government), armed and uniformed services, organized private sector employees, students of tertiary institutions, retirees, and voluntary contributors. Under Act 35, membership is not explicitly compulsory, which has created a challenge in phasing in all groups that comprise the formal sector. Contributions to the program are 15% of the employee’s basic salary, with the employee contributing 5% while employers contribute 10%. These contributions cover the employee, their spouse, and up to 4 children. Benefits include in-patient and out-patient care, as well as specialized care, eye care, dental care, and all prescribed medications and consumables.

The Informal Sector Program is directed at the self-employed and rural community dwellers. This program is based on a pilot conducted earlier in 12 communities, international study tours and desk review of global best practices. Participants in the informal sector program make a monthly contribution actuarially determined based on the benefits package set by the local insurance group. Some schemes of this nature are already in existence in some parts of the country, however, these operate outside the purview of NHIS.

The Vulnerable Groups Program is intended to be a subsidy program to cater to pregnant women, children under 5, the unemployed, orphans, prison inmates, and the permanently disabled. Individuals in this group are not required to pay contributions but are eligible for health benefits.

All levels of government, the private sector, and development partners work together to create a mixed health care economy of both public and private providers. The public system is organized as a federation with the Ministry of Health (MOH) responsible for policy formation, monitoring and evaluation, and operational responsibilities. State and local governments share responsibilities in management; states largely operate secondary health facilities, while local governments manage the local elements of primary health care, including dispensaries. States are responsible for training nurses, midwives, and community health extension workers (CHEWs). State and local governments have a great deal of autonomy, which effectively constrains the ability of the federal level to implement policies, creating a gap between federal legislation and local practice.

Currently, 61 Health Maintenance Organizations (HMOs) licensed by the NHIS facilitate the interface between the governmental organizations, the delivery system, and eligible contributors. HMOs work with providers under the supervision of the central government to determine provider payment. Decree 35 determined that the only payment systems in NHIS are capitation, fee-for-service, per diem, or case payment. A capitation system is the predominant form of provider payment used to pay primary healthcare facilities, while secondary and tertiary healthcare facilities are paid by fee-for-service and per diem.

Under the NHIS, a three level healthcare delivery system is operated. More than 60% of all registered facilities are privately owned. In the Formal sector Program, the choice of primary health provider is that of the contributor. Primary healthcare providers serve as gatekeepers, regulating the entry of enrollees into the other levels of care in the system through referrals, which must also be endorsed by the HMOs. Utilization rates for secondary and tertiary care based on returns from the HMOs have been very low. Anecdotal evidence suggests an under production of these services (through under endorsement by HMOs) to save cost and make more profits.

The NHP also created the National Health Management Information System in 2006 to establish effective Health Information Systems, coordinate information sub-systems, provide technical and managerial support to health information, ensure timely sharing of relevant data, and serve as a regular feedback mechanism.

Funding: 
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The National Health Insurance Scheme (NHIS) is funded primarily by contributions from members based on income. For the Formal Sector Social Health Insurance Program contributions are premiums that make up 15% of an individual’s basic salary, with the employer contributing 10% while the employee pays 5% for coverage of themselves, their spouse, and up to 4 children. An employer may negotiate with an HMO for coverage of additional supplementary benefits and pay the extra contributions required. Participants in the Informal Sector Program are expected to make a monthly contribution based on the benefits package of their choice as well as other factors. The poor, elderly, veterans, and disabled are exempted from paying membership premiums.

The National Health Insurance Scheme (NHIS) is funded primarily by contributions from members based on income. For the Formal Sector Social Health Insurance Program contributions are premiums that make up 15% of an individual’s basic salary, with the employer contributing 10% while the employee pays 5% for coverage of themselves, their spouse, and up to 4 children. An employer may negotiate with an HMO for coverage of additional supplementary benefits and pay the extra contributions required. Participants in the Informal Sector Program are expected to make a monthly contribution based on the benefits package of their choice as well as other factors. The poor, elderly, veterans, and disabled are exempted from paying membership premiums.

The funding structure of the Nigerian health system draws on colonial origins, when services were financed primarily by the central government. Currently, allocations from general government revenue comprise about 26.1% of overall funding, 6.1% comes from private organizations and 1.8% from development partners. Household out of pocket expenditures remain the largest source of financing, providing about 55.9% of total revenue.

Population covered: 
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Health insurance is obtained either through private insurers or the National Health Insurance Scheme (NHIS). About 5 million people are enrolled in the 3 NHIS Programs, which represents just about 3% of the population. In the Formal Sector Program, employees in the formal sector who pay premiums are covered, in addition to their spouse and up to 4 dependants. Companies that employ more than 10 workers are responsible for enrollment of their employees.

Health insurance is obtained either through private insurers or the National Health Insurance Scheme (NHIS). About 5 million people are enrolled in the 3 NHIS Programs, which represents just about 3% of the population. In the Formal Sector Program, employees in the formal sector who pay premiums are covered, in addition to their spouse and up to 4 dependants. Companies that employ more than 10 workers are responsible for enrollment of their employees.

In the Informal Sector Program, the self-employed and individuals living in rural communities enroll themselves. The self-employed must join with at least 500 other members who are occupation based (ie: taxi drivers) to qualify. Rural dwellers have a similar modus operandi, but participants need to belong to the same community rather than the same occupational group. These Social Health Insurance Schemes are self-governed, with elections held to determine who will represent the community. In order to stay enrolled, members are expected to make a monthly contribution actuarially determined based on the benefits package of their choice. Participants requiring specialist or longer treatment would need to pay for the balance from what they are entitled from the common pool. These schemes are expected to cover more than 60% of the rural and self-employed population, though due to poor data collection, the exact population enrolled is difficult to determine.

The enrollment levels in private insurance is uncertain, but based on submissions from private insurers to NHIS, less than 1 million people are privately insured.

The NHIS utilizes 61 Health Maintenance Organizations (HMOs) as health managers for paying healthcare providers, quality assurance, and registration of enrollees and sensitization of participants as part of improving transparency of the system. HMOs contract with the NHIS to manage the enrollment of individuals in health insurance schemes; to collect their payments; pay the healthcare providers; and to provide basic quality management of the health insurance scheme that covers formal employees.

Benefits package: 
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The benefits package for the National Health Insurance Scheme for workers in the formal sector is pre-determined and includes:

  • Out-patient care, including necessary consumables
  • Prescribed drugs, pharmaceutical care and diagnostic tests on the National Essential Drugs List and Diagnostic Test Lists
  • Maternity care for up to 4 live births for every insured contributor
  • Preventive care, including immunization, health education, family planning, antenatal and post-natal care
  • Consultation with specialists with a referral
  • Hospital in-patient care in a standard ward for a 15 cumulative days per year
  • Eye examination and care, excluding the provision of spectacles and contact lenses
  • A range of prostheses (limited to artificial limbs produced in Nigeria)
  • Preventive dental care and pain relief (including consultation, dental health education, amalgam filling, and simple extraction)

The benefits package for the National Health Insurance Scheme for workers in the formal sector is pre-determined and includes:

  • Out-patient care, including necessary consumables
  • Prescribed drugs, pharmaceutical care and diagnostic tests on the National Essential Drugs List and Diagnostic Test Lists
  • Maternity care for up to 4 live births for every insured contributor
  • Preventive care, including immunization, health education, family planning, antenatal and post-natal care
  • Consultation with specialists with a referral
  • Hospital in-patient care in a standard ward for a 15 cumulative days per year
  • Eye examination and care, excluding the provision of spectacles and contact lenses
  • A range of prostheses (limited to artificial limbs produced in Nigeria)
  • Preventive dental care and pain relief (including consultation, dental health education, amalgam filling, and simple extraction)

Exclusions for the package include:

  • Occupational/industrial injuries
  • High technology investigations, except in life-threatening emergencies
  • Injuries resulting from natural disasters, political conflicts, epidemics and extreme sports
  • Drug abuse/addiction
  • Transplant and cosmetic surgeries

The benefits packages for the informal program of the National Health Insurance Scheme (NHIS) are determined by the stakeholders through a process of consensus building. Members determine the benefits package according to local needs.

Service delivery system: 
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The National Health Insurance system (NHIS) accredits both service providers and the Health Maintenance Organizations (HMOs) that interface between providers, the NHIS and its beneficiaries. To receive accreditation, health facilities must meet a number of requirements for the physical facility and the personnel, including:

  • All medical professionals must be in possession of the current license to practice;
  • The facility must be appropriate for service delivery;
  • Facility must be registered with state authorities;
  • Facility and staff must possess malpractice insurance.

The National Health Insurance system (NHIS) accredits both service providers and the Health Maintenance Organizations (HMOs) that interface between providers, the NHIS and its beneficiaries. To receive accreditation, health facilities must meet a number of requirements for the physical facility and the personnel, including:

  • All medical professionals must be in possession of the current license to practice;
  • The facility must be appropriate for service delivery;
  • Facility must be registered with state authorities;
  • Facility and staff must possess malpractice insurance.

In addition, an accreditation fee is required. Currently 61 HMOs have been accredited and registered by NHIS in addition to about 6,000 primary care providers, 1,000 ancillary providers, and over 600 secondary and tertiary providers. Recently the NHIS announced the suspension of accreditation of new HMOs and providers because there is a need to strengthen the scheme and improve quality of healthcare services delivery through reaccreditation.

In general, the service delivery system in Nigeria is organized on a tiered basis:

  • Tertiary facilities are operated by the central government and form the highest level of health care and serve as referral centers for patients;
  • Secondary facilities are managed by state governments and provide some specialized health services;
  • Primary facilities are run by local governments and provide the most basic entry point to the health care system at health centers, clinics, and dispensaries.

The service delivery system is mixed between private and public providers. The private health care system has grown substantially since the 1980s, to currently provide about 80% of the total health services. This sector, however, is not well regulated or supported. Of all the private facilities in Nigeria, about 50% are for-profit. Despite the large number of service providers, coverage of most key preventative and curative health services is relatively low. There are large disparities in geo-political zones, between rural and urban zones, and with regard to socio-economic status; the poorest fifth of the population are much less likely to receive medical services than their counterparts in the wealthiest 20% of the population.

Institutional structures: 
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The National Health Insurance Scheme (NHIS) is the body responsible for regulation of the system and the different health insurance schemes. The Governing Board of the National Health Insurance Scheme is the National Health Insurance Council (NHIC). NHIC works to regulate the scheme (including setting standards, determining contribution rates, providing technical support, etc), license HMOs and providers, train health care providers, and manage the National Health Insurance Fund (NHIF).

The National Health Insurance Scheme (NHIS) is the body responsible for regulation of the system and the different health insurance schemes. The Governing Board of the National Health Insurance Scheme is the National Health Insurance Council (NHIC). NHIC works to regulate the scheme (including setting standards, determining contribution rates, providing technical support, etc), license HMOs and providers, train health care providers, and manage the National Health Insurance Fund (NHIF).

HMOS are licensed by the NHIS to facilitate the provision of healthcare benefits to contributors under the Formal Sector Social health Insurance Program; to interface between eligible contributors, including voluntary contributors and the healthcare providers, ensure member registration, public education about the schemes, collect premiums from members and employers, contract with providers, process claims, and pay claims directly to providers.

HMO Activities

The informal sector scheme under the NHIS is managed by a Board of Trustees composed of the Chairman, Secretary, Treasurer and four others. A clerk is appointed to carry out clerical and accounting duties. The Board of Trustees has executive power and is responsible for collecting contributions from participants, paying providers for services rendered, and operating a bank account with an NHIS accredited Bank.

The Nigerian system is organized as a federation and divided into three tiers: federal, state, and local. The federal government sets overall policy direction and standards, implements national immunization programs, and oversees federally funded tertiary health facilities. The states undertake policy making and regulation as well as financial responsibility for the personnel, operating costs, and capital investment of the tertiary, secondary, and primary care facilities. The 774 local government associations (LGAs) are responsible for primary health care delivery, under the guidance and supervision of federal and state departments of primary health care. LGAs tend to exert the least influence in this system, and frequently suffer from insufficient funding.

Provider payment mechanisms: 
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Patients are allowed to choose their primary provider from the list of accredited facilities, which includes both public and private providers. The provider network is used for access and secondary referrals, which acts to control costs and maintain viability of the system. Provider payment mechanisms are primarily determined by the National Health Insurance System (NHIS) Governing Council.

Patients are allowed to choose their primary provider from the list of accredited facilities, which includes both public and private providers. The provider network is used for access and secondary referrals, which acts to control costs and maintain viability of the system. Provider payment mechanisms are primarily determined by the National Health Insurance System (NHIS) Governing Council. For private insurers, this is determined between HMOs and Providers, with oversight from the central government, and referral to specialist care follows guidelines that are managed accordingly. Decree 35 determined that the only lawful payment systems to be included in NHIS are capitation, fee-for-service, per diem, or case payment. A capitation system is the predominant form of provider payment used to pay primary healthcare facilities, while secondary and tertiary healthcare facilities are paid by fee for service and per diem.

Technologies employed: 
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The NHIS is working on a platform, known as the e- NHIS. When this is deployed, the Scheme will have facilities for real time online capabilities.

The NHIS is working on a platform, known as the e- NHIS. When this is deployed, the Scheme will have facilities for real time online capabilities.

Regulation: 
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The federal government is the body officially in charge of regulation of the system; however, policy has diverged significantly from practice. There is a lack of clarity regarding responsibilities at the local and central levels, which impacts reporting rates, data use, data sharing, and data availability and regulation of the system.

The federal government is the body officially in charge of regulation of the system; however, policy has diverged significantly from practice. There is a lack of clarity regarding responsibilities at the local and central levels, which impacts reporting rates, data use, data sharing, and data availability and regulation of the system.

Monitoring and evaluation: 
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Monitoring and evaluation is a joint responsibility shared by the Health Maintenance Organizations (HMOs) and the National Health Insurance System (NHIS) in Nigeria. HMOs are required to undertake occasional reviews and evaluations of health care providers, while the National Health Insurance System is expected to evaluate and monitor all the programs. The effectiveness of monitoring and evaluation by these bodies is difficult to ascertain, and some argue that it does not extend past registration and accreditation of institutions.

Monitoring and evaluation is a joint responsibility shared by the Health Maintenance Organizations (HMOs) and the National Health Insurance System (NHIS) in Nigeria. HMOs are required to undertake occasional reviews and evaluations of health care providers, while the National Health Insurance System is expected to evaluate and monitor all the programs. The effectiveness of monitoring and evaluation by these bodies is difficult to ascertain, and some argue that it does not extend past registration and accreditation of institutions.

Monitoring of the overall health system has fluctuated throughout history. In the 1960s and 1970s Nigeria had a functional medical statistics system, where data was published on a quarterly and annual basis. However, the creation of parastatal health organizations such as the National Primary Health Care Development Authority and the development of disparate disease-specific programs, each of which has its own data collection and monitoring system, have severely weakened the High Information System monitoring and evaluation. The National Health Management Information System (NHMIS) unit was created in 2006 in order to establish effective Health Information Systems (HIS) at the state level. Quality of monitoring of the private health sectors by the government is limited. While the state accredits institutions and personnel, enforcement activities are limited. Professional associations do not actively assure quality, though some chapters of the Nigeria Medical Association do have committees on ethics and discipline. Funding for HIS activities has consistently been lacking, impeding sufficient resource allocation, infrastructure development, and capacity at the local level to collect and utilize data.

Results of the reform: 
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Since the implementation of National Health Insurance System, about 5 million Nigerians can readily access care through the NHIS. The NHIS benefits package is very comprehensive, covering virtually all the medical needs of enrollees- from consultation to drugs, consumables and major and minor surgeries. Studies have found that income and occupation impact usage of NHIS services; a large percentage—about 67%—of civil servants and professionals make use of NHIS services. Use of NHIS services is lower among low-income groups and young people, which is because the programs that target these populations still have not been introduced or fully incorporated into the NHIS system. Thus, while it appears that coverage has been extended greatly for the population, there are still about 46 million Nigerians, or 33% of the population, with no access at all to organized modern health insurance.

Since the implementation of National Health Insurance System, about 5 million Nigerians can readily access care through the NHIS. The NHIS benefits package is very comprehensive, covering virtually all the medical needs of enrollees- from consultation to drugs, consumables and major and minor surgeries. Studies have found that income and occupation impact usage of NHIS services; a large percentage—about 67%—of civil servants and professionals make use of NHIS services. Use of NHIS services is lower among low-income groups and young people, which is because the programs that target these populations still have not been introduced or fully incorporated into the NHIS system. Thus, while it appears that coverage has been extended greatly for the population, there are still about 46 million Nigerians, or 33% of the population, with no access at all to organized modern health insurance.

Emanating from the reforms, the health outcomes in Nigeria have shown steady improvements. Though life Expectancy may have decreased between 1991- 2001, there has been a reversal of this trend as shown by the WHO 2006 report (Female 49 : Male 48). Infant mortality which used to be one of the worst in the world has also recorded marked improvements. The NDHS 2008 revealed a figure of 75 as against 105 in 1999. Maternal Mortality ratio has also reduced tremendously. From a figure of over 1000/100000 live births, the figure has reduced to 545 (NDHS 2008). More improvements are expected as the various aspects of the reform continue to yield dividends.

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