In this exclusive interview with Africa Health Report’s Gom Mirian, renowned health insurance policy expert and the Managing Director and Chief Executive Officer of the Ultimate Health Management Services, Otunba Lekan Ewenla, assesses the health insurance programmes in the country and proffers ways to make it beneficial to more Nigerians.
Excerpts.
Has Nigeria’s health insurance scheme been able to fulfil its mandate of providing adequate and affordable health insurance to citizens?
The introduction of the Health Insurance Programme based on Act 35 of 1999 has fulfilled the mandate of enrolling Nigerians on the health insurance programme. I will say that it has been fulfilled because that law was passed to enrol the public former sector employees on the health insurance programme, and not all Nigerians.
Most Nigerians seem not to understand the fact that that law was passed with the formal sector in mind, which is divided into the public sector and the organised private sector and why that law focused on the formal sector. I’d also like to clarify quickly the fact that it is the statutory responsibility of every employee of labour with a minimum of five staff, to enrol your workforce on the health insurance programme.
It is your statutory responsibility to include the payment of medical allowance in the salary of your workforce. So what that law was meant to achieve was to encourage employers of labour to convert that medical allowance to health insurance premium for their workforce, because it has been confirmed that staff never utilised medical allowance to procure healthcare services.
When the staff collect their paycheck, they can spend the entire salary the way they desire but when there’s need for them to assess healthcare, the money or the fund may never not be available, so they resort to self-medication or spiritual intervention.
That led to the introduction of health insurance, which was not peculiar to Nigeria. It was a United Nations directive to all member nations of the United Nations. So, the health insurance programme was introduced in 1999 by Act 35 of 1999, which was finally activated in 2005. It was basically to encourage employers of labour to convert their medical allowance to health insurance programme premiums for their workforce.
And what the Federal Government did was convert the 10 percent of the basic salary that was meant to be paid as medical allowance to health insurance premium for all federal civil servants, from the lowest to the highest cadre. And it was made mandatory for everyone working for the federal government, making it a social scheme. So with this analysis, with this explanation, I would like to also repeat the fact that it has fulfilled its mandate.
There is public outcry, especially from Nigerians in the informal sector, about being left out of the health insurance programme. Are there measures in place to factor them in?
Shortly after this law was passed in 1999, it was very clear that based on the available statistical data, the bulk of Nigeria’s population is in the informal sector. We have only an average of about 15% of Nigerians that are in the formal sector. So it became so glaring that there was the need for the scheme to be extended to those that are in the informal sector looking at the population of Nigerians in the informal sector, which is equally the same across the globe.
And the government started looking at how this could be done. A lot of programmes have been introduced from that 1999 to 2005 and sometime last year, we had a community-based health insurance programme to cover the people in the informal sector. At a certain point, the benefits package that is been enjoyed by the federal civil servants was denominated and extended to people who work in the informal sector, focusing on associations, groups of semi-skilled, skilled, and unskilled workers.
Some Nigerians in the informal sector were enrolled on this health insurance programme between 2005 and sometimes, even up till now. There was a programme that was initially carved out from that process called the voluntary contributor’s social health insurance programme, designed for the informal sector, small scale, micro business and medium scale businesses and the premium was denominated to be N15,000 per person per annum.
But when people enrolled, we equally discovered a few challenges like the adverse selection challenge, whereby it was only those that were in dire need of health care that were buying that particular product and those that were seen to be healthy were not enrolling in. You see someone paying a premium of N15,000 to do an appendises spectral of over N200,000 and other expensive surgeries.
So when this was seen as a major challenge, we also went back to the drawing board and the leadership of the NHIA, as we speak today, having been in the industry since inception, having been so knowledgeable about the programme since inception, also saw the need for it to be reconfigured and now that product has been changed to group individual and family social health insurance programme to majorly address the challenge of adverse selection and that means group, individual and family can also buy the same product as we speak today.
I would like to share the good news with you that governments have been listening and have recognised the major challenge through the reports submitted through the Millennium Development Goals (MDG) programme and the international bodies, looking at the compliance by all member nations in the implementation of the MDGs, especially the ones that concern health, has since gone back to the drawing board and developed Sustainable Development Goals (SDGs) and with that, the issue of health insurance scheme was completely reconfigured.
The government is now refurbishing public primary healthcare centres and urging passage of legislation to make health insurance mandatory in those states so that those who are perceived to be vulnerable are first stored in those renovated primary healthcare facilities and thereafter, those that are being enrolled on the health insurance programme in the states will now have access to health care.
This is the first time in the history of this country that the government is addressing healthcare from the perspective of the demand and supply value chain. Last year, on 19th May to be precise, the government passed the law to make health insurance, enrollment on the health insurance programme, mandatory for all Nigerians and the government also used that to highlight the need for this country to adopt what we call ‘One nation, One health’.
This is a concept whereby the government introduced a universal basic plan for all states of the federation, such that should you buy this basic plan in Lagos and you find yourself in Sokoto, it is the same benefits package you are going to enjoy and still the same gifts we are talking about and the denomination is still at N15,000 per person per annum. That was done basically to ensure the enrollment, systematic enrollment of Nigerians that are in the informal sector – the market women, the artisans, spare part dealers, the panel beaters, the mechanics on this insurance programme – and so that’s been taken care of now legally.
And the law has been passed for over one year now. And what we’re doing now is just waiting for the configuration and rolling out of the secondary law. The primary law has been passed, so the secondary law which is the operational guideline is being worked on now, by the authority and that is to set the stage for systematic rollout. What we have on the table as we speak today is essentially a designed benefit package of excellence programme that will be locally driven by the state of the federation within the FCT that is being worked out.
One thing is certain, this government is equally looking at coming up with a framework to ensure compliance because Nigerians seem not to have too much respect for our laws. We don’t want this particular law to just be law on the shelf, we want it to be something that every Nigerian will comply with, and that is also being worked on as we speak today.
How does the absence of legal instruments impact health insurance compliance?
Like I have said in the course of this discussion, the introduction of health insurance across the globe was a concept designed to ensure the well-being of all people across the globe. And if you want to ensure the well-being of all people across the globe, it goes beyond just making it mandatory on paper, you need to develop the framework to ensure very fundamental compliance.
Without a robust legal framework, health insurance remains a voluntary option for individuals, rather than a mandatory requirement. This results in low participation rates, as many Nigerians perceive health insurance as an unnecessary expense. Moreover, the absence of legal enforcement leaves room for non-compliant healthcare providers. I’m so sorry to say that Nigerians don’t have respect for our laws, so there is a need for somebody to take the bull by the horns to ensure that compliance is strict. So that is a major issue that I know has been looked at by the regulatory agency.
It’s been decades since the inception of NHIA in Nigeria, but only 17 per cent, according to the agency are enrolled. What could be attributed for this?
The 17%, remember that I mentioned this new law was enacted in May of last year, but it hasn’t been put into effect yet. We are still relying on the outdated law that was focused on formal sector, and let me go further to emphasise that it was weak enough to discourage compliance. Which is why many states in the federation chose not to enrol their employees in the public sector social insurance programme. It was left at the discretion of the governors.
Maybe at this time, I should make this more clear. When we refer to the public sector, we include all three tiers of government: federal, state and local. Both the local government and the majority of states failed to comply. That was solely done by the federal government, and I want to take this opportunity to begin to highlight to the governors that it is their statutory responsibility to comply with this law, they are expected to also pay 10% of the basic salary of all civil servants in their states, including local government as medical allowance to them.
When you look at the number of Nigerians working at the state and local government levels who are enrolled in this same health insurance program, it shouldn’t be at the 17% that the NHIA mentioned; it all boils down to noncompliance with the law. The same thing goes for even the organised private sector.
The law says employers of labour with a minimum of five employees ‘may’ enrol their workforce. If it was made mandatory, the compliance would have been strong. But the fact that it was just a ‘may’ is like, we may not. That’s why this new law is now highlighting mandatory enrollments.
What would you advise should be done to scale up health insurance coverage in the country?
We all understand the importance of compliance with the law, especially those of us who are foreign citizens or who frequently travel overseas for business or pleasure.
You don’t play fast and loose with the law. The establishment of health insurance was or is for the benefit of individuals, especially because a large number of Nigerians cannot afford to pay out of pocket. Therefore, if the government is now urging people to sign up for a programme that allows the wealthy to cross-subsidise the medical needs of the poor, the healthy to help the sick by helping to pay for their medical expenses, I don’t think we need to talk too much.
Sickness is one thing that no one can predict when it will happen, thus no one can claim with certainty that I won’t touch this money or that I’ll use it till then. It’s great that you can just stroll into the healthcare centre of your choice with your ID card and assess care. It’s great for me. It is, in my opinion, the only way to guarantee the welfare of everyone on the planet.
A healthy nation is a wealthy nation, healthy families, a wealthy family, a healthy individual is a wealthy individual. Let us take it beyond just talking about it and acting about it. This initiative was created for Nigerians’ welfare, thus I believe we should all be concerned about it.
