Earmarking in Ghana: Impacts on the Financial Sustainability of the National Health Insurance Scheme

JLN Network Manager

By Daniel Asare Adin-Darko 1 

This piece is one in a series of blog posts reflecting health financing practitioner’s perspectives on domestic resource mobilization reforms and dynamics around health financing in their countries. This work stems from the Joint Learning Network’s Dynamic Inventory of DRM Efforts. The findings, interpretations, and conclusions expressed in this work reflect the views of the authors and do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. Please contact [email protected] if you have experiences that you would like to share.

Costal Development Authority (CODA) in Ghana registering citizens within the costal belt onto the NHIS in 2020.

In 2003, Ghana’s National Health Insurance Scheme (NHIS) was established using a set of unique earmarked funding sources to help move the country toward Universal Health Coverage (UHC). This funding provided a critical source of domestic revenue that allowed Ghana to remove its previous “cash and carry” system of paying for health services and implement one of the best-known public insurance schemes in the region.

Although the reforms enabled the formation of the NHIS and led to an initial increase in domestic public spending for health, fiscal gains declined over time, slowing down the overall impact and additionality of resources (both per capita and as a share of GDP; see Figure 1). [i]  Additionally, while the earmarked funds provide on average 91 percent of NHIS’s funding and 26 percent of resources for public programs in the health sector, Ghana continues to face financial sustainability challenges including increasing costs of medical claims due to rising population coverage of the scheme and utilization of health services, delays in the release of funds and inadequate expenditure controls. As such, the NHIS began experiencing financing deficits in 2009, utilizing investments to finance the gap.[ii]

Table 1. Indicators
Population (thousands) 29,767
Life expectancy (years) 64
Fertility rate 4
Human Capital Index (HCI) score .45
GDP per capita (current US$) 2,826
Current health spending (CHE) Per capita (US$) 78
Share of GDP (%) 4
Share of CHE (%)
Domestic government 39
External health expenditure 12
Social Health Insurance (SHI) 11
Out-of-pocket 38
GGHE- D (% GGE) 6
Share of total government expenditure (%) Health 6
Education 19
Military 2

Sources: Health expenditure data from WHO Global Health Expenditure Database (2018); other data from World Development Indicators (2018) and Human Capital Index (2020)

Note: Data in Table 1 downloaded on April 15 2021. HCI score from September 2020 includes measures of survival, education, and health. See HCI for further details.

New reform initiated in 2018—namely the decoupling of the National Health Insurance Levy (NHIL) from the Value-Added Tax (VAT), which made it a straight levy on the consumption tax—changed the structure of one of the initial earmarks to provide potential revenue gains for the NHIS. However, a separate capping system introduced in 2017 limited the amount of revenue that could flow to the NHIS and weakened the potential of the new reform to support Domestic Resource Mobilization (DRM) for health. This resulted in NHIS recording a total revenue shortfall of about GH₵1.5 billion (US$302.89 million) from 2017 to 2020.[iii] 

Figure 1. Domestic Public Funding on Health per Capita and as a share of GDP, 2000–2017

Source: Author’s calculation using data from WHO Global Health Expenditure Database.

1. Structure of NHIS.

Established through the National Health Insurance Act of 2003 (Act 650), the NHIS evolved as a result of political motivation to remove the previous “cash and carry” system of health care financing and move away from overreliance on out-of-pocket payments. The Act established the National Health Insurance Authority (NHIA, the managing body of the NHIS), the Council (the governing body or the Board of the Authority), and the National Health Insurance Fund (NHIF) (see Section 2). Since then, a single-payer system has been established through the new National Health Insurance Act, 2012 (Act 852). The passage of Act 852 replaced Act 650, made District Mutual Health Insurance Schemes (DMHIS) and NHIA one body to help harmonize activities, and injected some efficiency into the NHIS. DMHIS that had autonomously operated within districts—managing the enrollment, budget preparation, and claims of health care providers as independent legal entities with their own board of directors—became branches of the National Health Insurance Authority. Consequently, enrollment evolved into a national registry with biometric ID cards issued for members to access care across the country, to ensure full portability. District budgets were incorporated into the NHIA’s national budget as one entity, and a consolidated premium account was created.

In the NHIS, membership is mandatory but enrollment is voluntary: members must enroll annually, leading to challenges in service utilization and access as well as disparities in enrollment because of financial constraints which can impact vulnerable populations.[iv],[v],[vi] Despite this, utilization rates—especially of outpatient services— are strongly correlated with enrollment and have increased steadily since 2005 (Figure 2). Enrollment in NHIS increased from 1.3 million people in 2005 to 8.9 million people in 2012. As of 2018, NHIS was operational in 163 districts across the country with a population coverage of 36 percent (10.8 million people), up from 6 percent in 2005.[vii] . The NHIS membership coverage of the population rose to 41 percent (12.29 million people) at the end of 2019. One factor that likely contributed to the increase in membership in 2019 is the introduction of mobile membership renewal in December 2018 where NHIS members are able to renew their membership anywhere using money from their mobile phone wallets without having to go to the NHIA District Offices for the renewal, which comes with transportation cost, opportunity cost and other inconveniences.

Figure 2. Growth in Membership, Inpatient and Outpatient Service Utilization 2005–2018

Source: NHIA Statistical Bulletin 2019.

Note: There is not a 1:1 relationship between utilization/number of visits at health facility and registration as individuals registered as members may use services multiple times within the year.

The Minister of Health under Section 30 (1) of the National Health Insurance Act, 2012 (Act 852) also established a benefits package, which covers about 95 percent of the most commonly occurring disease conditions in Ghana. The package includes inpatient and outpatient services and medications related to the covered conditions. The benefits package comprises inclusion and exclusion lists of services.[viii] In addition, vaccines, antiretroviral (ARV) medicines, sickle cell and cancer screening, contraceptives, tuberculosis commodities, tetanus immunization, anti-snake medicines, malaria vector control program, ambulance service, construction of health training schools, lifts to public hospitals, and health provider system integration, among others, are provided by the Ministry of Health (MOH) but funded by the NHIA under the category of Public Health and Preventive Care and Health Service investment in the NHIA Annual Allocation Formula.

In terms of provider payment, capitation at the primary health care level was piloted in one region (Ashanti), but ultimately suspended due to implementation challenges (Box 1). Ghana Diagnostic Related Groups (G-DRGs)—a form of case-based payments—now covers services at all levels of care.[ix] The tariffs for public health care providers’ services to NHIS members are lower than that for private health care providers because government bears the labor cost and capital investment of the public service. Costs of medicines are reimbursed using fee for service at all levels of care.

2. First wave of DRM reform.

From a DRM perspective, Ghana’s reforms are interesting as they have helped the government move from a system that was largely funded out of pocket to a National Health Insurance Scheme financed by a set of earmarked taxes (National Health Insurance Levy), a social security contribution earmarked from payroll, the Road Accident Fund, premium and investment income, among other sources.

First, the National Health Insurance Act of 2003 (Act 650) expanded the consumption tax to include a 2.5 percent earmark called the National Health Insurance Levy (NHIL), which is collected by the Ghana Revenue Authority (GRA). The government raised the Value Added Tax (VAT) from 12.5 to 15.0 percent in 2004 to contribute to the NHIL, and then to 17.5 percent in 2014 to provide an additional marginal 2.5 percent to the Ghana Infrastructure Investment Fund. Linking an expansion of the consumption tax to health provided an opportunity for the GRA, which would have otherwise faced resistance to increasing the rate.

A share of social security funds was also earmarked for the scheme as a second source of statutory revenue. To secure this earmark, the government had to guarantee that worker pension payouts would not be affected and that they would make up any future shortfalls. As a result, 2.5 percentage points from a 17.5 percent contribution for old employees covered under the 1991 Social Security Law (PNDCL 247) and 2.5 percentage points from an 18.5 percent contribution for any new employees under the National Pension Act, 2008 (Act 766 amended) are both earmarked for the NHIF.[x] The Social Security and National Insurance Trust (SSNIT) manages contributions that come from both pension schemes, although 5 percent of the contributions under the new Act are managed under private pension funds. The SSNIT is then required to transfer 2.5 percentage points from the contributions received into the NHIF.

Figure 3. Funding Flows and Areas of Spending for NHIS










Source: Adapted from Cashin et al 2017 and NHIA Strategic Plan (2015-2018).

Notes: NHIL = National Health Insurance Levy; SSNIT = Social Security and National Insurance Trust; NHIF = National Health Insurance Fund; MOH = Ministry of Health.


Funds from both the GRA and SSNIT are first paid into a National Health Insurance Levy Account at the Bank of Ghana, then based on instructions from the Ministry of Finance and Economic Planning  (MOF) to the Controller and Accountant General, funds are released to NHIA (Figure 3). [xi]

The third source of statutory revenue for NHIS in Ghana is the Road Accident Fund, with contributions mobilized by the National Insurance Commission (NIC). A portion of vehicle insurance paid by vehicle owners is ceded to NHIA by NIC to cover road accident victims. Revenue from this source is relatively small and NIC transfers this money directly to the NHIA operational account.

Other sources of revenue include Internally Generated Funds (IGF), such as premiums and registration fees, credentialing fees from health care providers and investment income, which together in 2019 made up 7.5 percent of all revenue for NHIA. Formal sector workers contribute to the NHIS through Social Security payroll contributions, while other beneficiaries, including those in the informal sector, pay flat-rated premiums. The NHIS introduced a flat-rated premium to simplify implementation, in response to challenges of assessing income levels outside the formal sector. Children (under 18 years), pregnant women, those aged 70 years and above, pensioners under SSNIT Scheme, SSNIT contributors, as well as indigents (those classified as poor according to Ghana’s social cash transfer program, Livelihood Empowerment Against Poverty [LEAP]) are exempt from premium payments. However, it is a challenge to identify and target the poor for exemption. When delays occur in the release of funds from the NHIL account by the government, other sources of funds act as a cushion to the NHIA. Funds from international donors that directly support any aspect of NHIA’s operations also go straight to NHIA operational accounts.

NHIA spends its revenue in three main areas: payment to health care providers including private providers, administrative and operational expenses, and support to the Ministry of Health (Figure 3). Of the funds mobilized for running the NHIS, approximately 70 percent go to health care providers, 20 percent to administrative and general expenses, and 10 percent to the Ministry of Health through a capped “release valve” that allows for emerging priorities to be funded.

3. Revenue impacts of first reform.

In 2014, total earmarked revenue was just under GH₵1 billion (US$338.20 million), amounting to 91 percent of total funding (Table 2), with the NHIL and SSNIT making up an average share of 69 and 22 percent of NHIS revenue, respectively. The earmarked funding per beneficiary was GH₵92.96 (US$32.07).[xii] Despite this revenue base and the use of investment reserve funds to finance gaps, NHIS revenues fell short of recurrent expenditures by GH₵16.84 million (US$11.92 million) in 2009; payments to health care providers were delayed, and the NHIS went into arrears.

The liquidity challenges facing the NHIS are explained by the NHIA recording a cash ratio of less than  20 percent on the average (2013-2019). This means that the bank and cash balances together with short-term deposits of the NHIA are unable to meet 20 percent of its short-term obligations at a given time. This is attributable to a decline in investment reserves, delay in the release of funds to the NHIA and increased cost of the scheme. The delay in release of funds distorts the cash plan of NHIA, which causes early redemption of investment to finance the obligations at a cost.

Delay in payment of health care providers negatively affects the operations of the providers by limiting their ability to pay for medical supplies. In order to keep their operations running, some providers unlawfully bill NHIS members causing out of pocket (OOP) payments, which affect access to health care and make the poor more vulnerable and impact both member satisfaction and overall equity of the Scheme. In some cases, there is the possibility of unscrupulous providers re-billing NHIA for services that were paid OOP, which could go undetected due to the largely manual and unintegrated system in place.

The low NHIS population coverage of 41 percent as at the end of 2019 having operated for over fifteen years could be attributed to low service quality of the Scheme. The service quality is influenced by timeliness in release of funds to health care providers, timeliness in review of tariffs for medicines and services covered by NHIS, quality of service delivery to NHIS members at NHIA district offices and health care providers’ sites, strong system in place to detect and prevent levying of unauthorized charges by providers and strong legal system in place to timely sanction health care providers and NHIS members who misconduct themselves.

Box 1. Ghana’s Experience with Provider Payment Reform

Ghana has had mixed experiences with provider payment reform. NHIS started with the fee-for-service payment method in 2005, but it rewarded providers indiscriminately as they provided services to members even if the services were not needed. The Ghana-Diagnostic Related Grouping (G-DRG) payment method was introduced in 2008, leaving in place the itemized fee-for-service mechanism for medicines. The G-DRG method groups related diagnoses and procedures and determines the average cost per treatment in that group, which forms the basis of the tariffs used by health care providers. Ghana began introducing capitation in 2012 but suspended it in 2017 due to implementation and political challenges as well as complaints from health care providers.

While the passage of Act 852 helped to rectify some issues with harmonization across district offices and injected efficiency into the NHIS, other challenges persisted, including continued delays in release of earmarked funds to NHIA. For instance, the time lag from revenue collection of NHIL and SSNIT contributions to actual release of funds to NHIA is about five to six months due to delays in government paying social security contributions of public sector workers to SSNIT and different NHIL collection, reconciliation, and transfer mechanisms for domestic and import taxes. Additionally, there have been inadequate expenditure controls, such as through low implementation of strategic purchasing modalities that might improve efficiency (Box 1); increase in tariffs for medicines and services rendered to insured members; and largely manual submissions and vetting of health care providers’ claims as well as high administrative and operational costs.

Reforms such as membership authentication at health care provider sites and increased clinical and compliance audits have been instituted to curb the open-ended provider payment systems that were the main source of unchecked growth; however, concerns regarding the financing of the NHIS continue to persist. To mitigate issues involving late payment of claims to health care providers as a result of delay in release of funds, in 2011 and 2012 the NHIA secured alternative funding at a cost to finance the gap. Additionally, on a number of occasions, NHIA has made proposals to the government to increase funding, for instance, by lobbying for increases in the National Health Insurance Levy, upward review of premiums, introduction of new direct contributions from employers and employees outside of their social security contributions, introduction of a health/sin tax, and communications service tax, to name a few. These proposals, contained in review documents as recommendations, had not been granted as at the close of 2020. In fact, politicization of the NHIS has negatively affected the ability to make any effective requests for additional revenue for health. While the premium has not seen any major adjustment in some time due to lack of political will on the part of government,  an increase in premiums remain unpopular, as opposition political parties can exploit the issue to campaign against the incumbent, declaring this would lead to worsened outcomes for the poor majority. As such, no other significant revenue-raising efforts for the NHIS has been made. By 2017, the funding gap was reported as GH₵379.69 million (US$87.20 million).[xiii]

4. Second wave of DRM reform.

To address the NHIS funding gap while circumventing political issues associated with consumption tax rate adjustments, in 2018 the government decoupled the NHIL and the GETFund Levy[xiv] for education from the VAT and made them straight levies with individual constant marginal rates, which allowed the government to increase revenues without changing the rate value. To apply this change, the NHIL (2.5 percent) and GETFund Levy (2.5 percent) remained at their current rates, and VAT remained at 12.5 percent. However, NHIL and GETFund Levy are computed and added first to the value of taxable supplies of goods and services. The 12.5 percent VAT is then charged on the total value, which includes the NHIL and GETFund Levy.

This proposal was initially well-received by those in the health sector, as it was considered to have positive impacts on revenue for health. However, there was a catch. In 2017, a nonsector-specific cap, setting the amount of earmarked revenue that can go to a source, was also put in place under the Earmarked Funds Capping and Realignment Act, 2017 (Act 947). On an annual basis, the cap for each statutory fund is determined by an overall assessment of current government priority programs for that year, with the allocation of domestic resources aligned accordingly. Under Act 947, all allocations to the various statutory funds must not exceed 25 percent of all government revenue. The capping provides an avenue to deal with budget rigidities and create enough fiscal space for government to undertake its economic policies. While this provided a “check” on overspending, it also created a mechanism for the Ministry of Finance and Economic Planning to retain additional revenue that was raised for health, education and others, realigning funding flows to weaker areas and avoiding the need to increase taxes in other ways. The budget statement now includes both how much the government will collect and how much it expects to pay to the NHIF—plausibly leaving unused revenue to be reallocated for other fiscal purposes. As such, the cap is seen as a negative measure by the health sector, weakening the power of the 2018 reform and constraining potential revenue for NHIS operations.

In March 2020, Ghana recorded the first incidence of the coronavirus disease (COVID-19) and the effect of the pandemic caused the Ghanaian economy to contract in the second and third quarters of 2020.  The impact of the pandemic caused government total revenue to fall while government total expenditure increased, thereby widening the fiscal deficit for 2020.  The Fiscal Responsibility Act, 2018 (Act 982) requires that the budget deficit shall not be more than 5% of Gross Domestic Product (GDP). The projected budget deficit for 2020 was 4.7% of GDP. However, by the end of 2020 this had increased to 11.7% of GDP due to the expenditure on the pandemic, and as such the fiscal rule was suspended under section 18 of the Public Financial Management Act, 2016 (Act 921), which is allowed in times of natural disaster, public health epidemic and war among others. The pandemic affected the annual GDP growth rate as the country recorded 0.4 percent as opposed to the initial projected figure of 6.8 percent for the year 2020.

The COVID-19 pandemic negatively affected government tax revenue for 2020 and consequently the National Health Insurance Levy. The Ghana Revenue Authority was able to mobilize for the National Health Insurance Levy a total amount of GH₵1.80 billion (US$321.37 million) out of the initial budgeted revenue of GH₵2.01 billion (US$358.86 million) leaving an adverse variance of GH₵210 million (US$37.49 million). To mobilize domestic resources, to deal with the COVID-19 pandemic,  the government introduced a COVID-19 Health Levy by increasing the NHIL from 2.5 percent to 3.5 percent per the COVID-19 Health Recovery Levy Act, 2021 (Act 1068) in 2021.[xv] This is to provide the requisite resources to sustain government’s effort in dealing with the COVID-19 pandemic from 2021.

5. Revenue impacts of second reform.

The new financial dynamic between the NHIF, the cap, and the straight levy are complicated (see notes to Table 2). The straight levy is estimated to generate an additional GH₵250 million (US$54.46 million) annually for NHIS. While resource transfers have seen gradual increases over time, the NHIF has never been credited with all resources raised within the same year for its purpose, with the amount transferred to NHIF averaging approximately 70 percent of total revenue raised annually. As a result of the cap, NHIA had a revenue shortfall of about GH₵1.5 billion (US$302.89 million) from 2017 to 2020. As of 31st December 2019, most health care providers’ bills had only been paid on average up to April 2019, and eight months of claims (May to December 2019) were outstanding. Given that there is a three-month window to adjudicate claims, this leaves five months of outstanding payments. By the end of 2020, the arrears had reduced from five months to three months due to improvement in release of funds to NHIA, which helped to manage provider complaints in 2020.[xvi] While there are discussions to exempt the NHIL and Social Security contributions levies from the capping system, this situation is still unfolding. NHIA through its constant engagements was able to dialogue successfully with MOF and SSNIT so in April 2020, it was agreed that SSNIT directly transfer SSNIT contributions to NHIA, including arrears starting from December 2018. This had positive effect on the total revenue position of NHIA and increased the liquidity of the Scheme in 2020.

Further, there have been secondary impacts of the revised tax structure. For instance, both the NHIL and GETFund Levy are now treated as “business expenses,” where businesses can no longer claim input tax credits against them, and these are thus at a cost to the firm.[xvii] On the positive side, the reengineering of the indirect tax on goods and services increased visibility of funds to the education sector. On VAT receipts, the GETFund levy has been added as a separate line along with the NHIL, providing additional transparency for consumers.

As a more recent development, and in order to combat the effects of the COVID-19 pandemic and put the Ghanaian economy back on track, the government is seeking to increase domestic resources mobilization and has increased the NHIL by one percentage point. The additional funds to be generated in 2021 through this increase, which is estimated at GH₵889.07 million (US$153.29 million) will be earmarked as a COVID-19 Health Recovery Levy, and will not go directly to NHIA but instead allocated to MOH to procure COVID-19 vaccines and other commodities. In the 2021 Budget Statement and Economic Policy, the Ghana government is expected to raise a total amount of GH₵3.02 billion (US$525.16 million) from the existing 2.5 % NHIL and SSNIT contributions, out of which GH₵1.90 billion (US$330.40 million) will be allocated to the NHIA and the difference of GH₵1.12 billion (US$194.76 million) to be channeled to other priority areas due to the capping system in place.

Table 2. Ministry of Finance, Total Revenue to NHIA, by Source and Amount Generated from Earmarks   


6. Broader impacts of both reforms on public spending for health.

The earmarked funds provide on average 26 percent of funding for public programs in the health sector. During the first wave of reform and establishment of the NHIS, the earmarks had a positive impact on overall public spending for health: from 2004 to 2010, public spending on health rose from 0.75 percent of GDP to 2.38 percent of GDP (see Figure 1). While the NHIF has led to an increase in domestic public spending on health, over time the total allocation to health as a share of government expenditure decreased after an initial period of overall growth (Figure 4) due to competing demands of other sectors, weakening the net impact and additionality of these reforms, and indicating that there has not been long-lasting reprioritization between health and other sectors.[xviii]

Figure 4. Evolution of Ghana’s Domestic general government health expenditure (GGHE) as a Percentage of Government Expenditure, 2000-2018[xix]

Source: WHO Global Health Expenditure Database (2021) 

Furthermore, trends starting in 2014 indicate that the straight levy or cap may have an impact on the relative position of the NHIA to the overall government budget (Table 3).  For instance, the NHIA budget as a proportion of the overall government budget reduced from 3 percent in 2018 to 2 percent in 2019 and 2020. Similarly,  there was a reduction of the total health budget as a proportion of the overall government budget from an average of 12% (2014 to 2016) to 9% (2017 to 2020).

Table 3. Trends in Relative Budget Estimates for NHIA compared to Overall Health and Government Budget



7. Conclusion.

Earmarking was critical in allowing Ghana to establish its lauded National Health Insurance Scheme. However, some operational inefficiencies and inadequate expenditure controls impacted the financial sustainability and caused the scheme to operate at a deficit for some years. While a variety of reforms aimed at improving efficiency have helped to reverse this trend, experience has shown that earmarked resources did not lead to long-term reprioritization of health within the government budget. Subsequent reform that aimed to increase the amount of revenue collected through the National Health Insurance Levy (NHIL) was limited by a general cap on earmarked revenue. As such the additionality of the reform aimed at increasing revenue for NHIA remains in question. Most recently, the introduction of the COVID-19 Health Recovery Levy through an increase in the NHIL represents a major change that will provide a beneficial stream of funding to the health sector to meet emergency needs, although longer term impacts remain to be seen. In the case of the initial earmark as well as in subsequent reform, earmarking for health did provide a way for the government to expand tax collected from VAT to channel toward health as well as other priorities.


This note is written by Daniel Asare Adin-Darko ([email protected]) with support from Danielle Bloom and Jewelwayne Salcedo Cain, as well as inputs from Ajay Tandon, Ali Hamandi, Maria Eugenia Bonilla-Chacin, Somil Nagpal and the Joint Learning Network’s Domestic Resource Mobilization (JLN DRM) collaborative.


Daniel Asare Adin-Darko is a Deputy Director in the Finance and Investment Division of NHIA. He is a chartered accountant, chartered tax practitioner, and a chartered economist.




With gratitude, we acknowledge the guidance and technical review from colleagues in the National Health Insurance Authority of Ghana, Ministry of Health, Ghana, and in the World Bank: Vivian Addo-Cobbiah,1 Francis Owusu,1 Yaa Pokuaa Baiden,1 Gustav Cruickshank,1 Francis Asenso-Boadi,1 Francis-Xavier Andoh-Adjei,1 Nicholas Afram Osei,1 Rudolf Zimmerman,1Magnus Owusu-Agyemang,1 Eric Nsiah-Boateng,1 Emmanuel Kwakye Kontor,2 and Anthony Theophilus Seddoh.3

1 National Health Insurance Authority of Ghana.

2 Ministry of Health, Ghana.

3 The World Bank Group.

The World Bank’s support to the Joint Learning Network for UHC is made possible with financial contributions from the following partners:

[1] This note is written by Daniel Asare Adin-Darko ([email protected]) with support from Danielle Bloom and the Joint Learning Network’s Domestic Resource Mobilization (JLN DRM) collaborative. It updates information provided in the 2017 WHO working paper: C. Cashin, S. Sparkes, and D. Bloom. 2017. “Earmarking for Health: From Theory to Practice.” Geneva: World Health Organization. License: CC BY-NC-SA 3.0 IGO.

[i] Reversal of the upward trend in domestic public health expenditure observed circa 2011 (Figure 1) may be attributable to documented reductions in growth of both the health share of general government expenditure and the general government expenditure as a share of GDP.

[ii] Except during 2015–2020.

[iii] GH₵ = Ghanaian cedi.

[iv] Section 27 (1) of the NHIA 2012, Act 852, says, “A resident of Ghana shall belong to the National Health Insurance Scheme.”

[v] I.A. Agyepong, D.N.Y. Abankwah, A. Abroso, C.B. Chun, J.N.O. Dodoo, S. Lee, S.A. Mensah et al. 2016. “The Universal in UHC and Ghana’s National Health Insurance Scheme: Policy and Implementation Challenges and Dilemmas of a Lower-Middle-Income Country.” BMC Health Services Research 16: 504.

[vi] A. Kwarteng, J. Akazili, P. Welaga, P.A. Dalinjong, K.P. Asante, D. Srpong, S. Arthur et al. 2020. “The State of Enrollment on the National Health Insurance Scheme in Rural Ghana after Eight Years of Implementation.” International Journal for Equity in Health 19: 4.

[vii] NHIA Statistical Bulletin 2018 puts the coverage at 37 percent for 2017.

[viii] Type of care covered under NHIS benefits package includes outpatient and inpatient services, oral health and eye care services, maternity care and emergencies. It excludes services like rehabilitation (other than physiotherapy), cosmetic surgeries and aesthetic treatment, HIV retroviral drugs, dialysis, orthoptics, organ transplanting, and mortuary services among others.

[ix] Case-based payments can be developed based on a schedule of payments linked to diagnosis, often called diagnostic-related groups. These can be linked to standard disease classification systems such as International Classification of Diseases (ICD)-10

[x] All employees born before December 31, 1959, fall under the old pension scheme and contribute 5.0 percent of their basic salaries, while employers contribute 12.5 percent bringing the total to 17.5 percent.

[xi] Adapted from Cashin C., Sparkes S., Bloom D. Earmarking for health: from theory to practice. Geneva: World Health Organization; 2017. License: CC BY-NC-SA 3.0 IGO.

[xii] Note that this estimate was the revenue per beneficiary in 2014 and not per capita expenditure. Active membership in 2014 equaled 10.545 million.

[xiii] According to the NHIA’s 2017 Allocation Formula (budget).

[xiv] The Ghana Education Trust Fund (GETFund) levy was established in 2000 and is also funded through VAT.

[xv] Taking effect from 1st May, 2021, Act 1068 is a straight levy and is not allowable as an input tax deduction. This has the effect of increasing business expenses and prices of goods and services.

[xvi] The direct transfer of funds from SSNIT to NHIA in 2020,  improvement in release of funds by the Government to enable health care providers to manage the COVID-19 pandemic and the priority of the Government in 2020 contributed to this performance.

[xvii] World Bank. 2019. Doing Business 2020: Comparing Business Regulation in 190 Economies. Washington, DC: World Bank Group.

[xviii] Cashin C., Sparkes S., Bloom D. Earmarking for health: from theory to practice. Geneva: World Health Organization; 2017. License: CC BY-NC-SA 3.0 IGO.

[xix] Presented on February 1, 2020, by N. Otoo at Prince Mahidol Award Conference, “Parallel Session 2.1 Fiscal Space for Health: A Country Perspective from Ghana.” Data from 2019.


Have any reflections from your JLN experiences? Please share them using the comments feature, below.


  1. Solomon Appah

    You have done a great work. Thank you for enlighten me.

    • Francis Frempong

      Great article. Very well structured and well researched. I have to be reading over and over.

      • Leticia Osei-Poku

        A very detailed and informative article on the NHIS. As a nation, we must have the political will to ensure the sustainability of the scheme by looking at some of the points raised. Kudos, my brother.

    • Asare Samuel

      Excellent Article bringing out the strengths and weakness (performance) of the NHIA and the way forward.

  2. Nathaniel Otoo

    A very informative blog on the evolution of domestic resource mobilization for health in Ghana.Some of the key lessons that have been highlighted are that for domestic resource mobilization for health to be effective, it must be underpinned by deliberate efforts to improve fund flows and the implementation of efficiency gain, equity inducing and quality improving measures such as strategic purchasing. These considerations are all predicated on strong political will.

    Congratulations on the publication of this timely blog Daniel!

  3. Felix Mensah Agbo

    Very educative, insightful and factual. More grease to your elbows.

    • Samuel Adu-Nyarko Qolyns

      Hardly do we often get to read this kind of well-researched information on our health systems. Great work! Waiting to be enlightened more.

  4. Ismaila

    The writer has succinctly highlighted the financial issues and the current solutions being implemented.

    It’s a very good information on the NHIA and encourage him to do further publication on the financial of the private mutual health insurance schemes as well.

    Thank you.

  5. Atta Brenya-Bonsu jnr.

    This paper has brought alot of interesting revelation about the sustainability of the health insurance with regards to financing. The pictorial diagrams are very useful too. This work will benefit the academial, the technocrats as well as public officials. Cheers Dan!!! Congrats

  6. Abdul-Rahaman Moomen

    Very educative. Congratulations

  7. Theophilus Owusu-Ansah

    A simplified version of economic terms to make the reader appreciate the economics informing health care financing in the country Ghana from an insider and its implications, how to improve upon the revenue generation and to keep the scheme sustainable. It has helped shape my understanding.

  8. George Omaboe

    This paper is on all fours. I look forward to more publications in other areas that will also ensure the sustainability of the health insurance system.

  9. Dominic Yaw Peh, ACMA,CGMA

    This is a very insightful paper.I wish all those in corporate leadership could read this and have the gist at the center of their strategic decisions. Financial sustainability is a serious and common issue within SOEs that needs to be seriously addressed.
    Earmarking of funds by the Government and within the Institutions and adherence to same by the key stakeholders is key in the financial sustainability of the SOEs.

    This paper is therefore, clearly on point in addressing this matter. Kudos.

  10. Emmanuel Addo Asare

    Personally, I am so excited for this publication. For the fact that emperical research in the area of “Financial Sustainability of the NHIS” in Ghana is scanty to the best of my knowledge.

    The writer has done a great job by bringing to bear some of the pertinent issues surrounding the NHIS, and the way forward.

    Policy makers should pay attention to the content of this paper for implementation of a much better improved service.

    In so doing, the SDG goal 3: Good Health Care and Wellbeing would be materialised.

    Whilst I congratulate the writer for a good job done, I equally encourage him to do further publications in the coming years.

    Once again, well done Sir!

    Thank you.


    This is an excellent work. My boss kudos. Wao!

  12. Somil Nagpal

    It is very exciting to see this level of activity and interaction around the Practitioner Perspective Series and congrats to Daniel for an excellent contribution that is receiving so much positive feedback and interaction. It makes the entire DRM collaborative team very happy and motivated, and we hope other members of the DRM collaborative will consider contributions to this series soon.

  13. Christian Kwapong Bekoe

    This article has highlighted the true picture of healthcare financing in Ghana. This is timely for the health insurance industry. Excellent work! I look forward for more publications.

  14. Alex Peasah-Koduah

    A very elaborate approach to this article. Well done Daniel.
    A major problem to the financial sustainability of the NHIS stems from lack of commitment from the government to place the needed premium on health. It is sad to note that the 2020 health budget is only 7% of the national budget and that tells us how the government priortizes the health of its citizens.
    In an era when we are looking at Universal Health Coverage, 7% of national budget allocation to health is very abysmal and ought to be looked at again, especially, in times of the Covid 19 pandemic.
    For lack of discipline even if reforms are developed to increase revenue to fund the NHIS, government would introduce an Act – Earmarked Funds Capping and Realignment Act, 2017 to deny the health sector and for that matter the NHIS, the much needed funding.
    Indeed, the repercussions of this is seen in the poor quality of care offered to the citizenry under the NHIS. In as much as I believe in this social insurance for health for Ghanaians, and that healthcare providers must buy in and support it, we should not lose sight of the fact that quality care is paramount and yet not cheap.
    Someone ought to pay for the services provided and it is high time the government got truly committed and prioritised healthcare financing in this country.

    Thank you, Dan for this research paper.


Submit a Comment

Your email address will not be published. Required fields are marked *