Nigeria National Health Insurance Scheme Explained

Jun 07, 2025 0

National health insurance (NHI), sometimes called statutory health insurance (SHI), is a system of health insurance that insures a national population against the costs of health care. It is usually established by national legislation, but does not equate to government-run or government-financed health care.

In practice, most people paying for NHI will join it. National healthcare insurance programs differ both in how the contributions are collected, and in how the services are provided.

Let's delve into the specifics of national health insurance schemes, drawing examples and insights from various countries and focusing on the case of Nigeria's NHIS.

Funding Mechanisms and Administration

Funding mechanisms vary with the particular program and country. It may be administered by the public sector, the private sector, or a combination of both.

There are several approaches to funding NHI:

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General Taxation: Contributions are made via general taxation and therefore are not optional even though use of the health system it finances is. Examples include Australia's Medicare system and the UK's National Health Service.
Government Payment from Tax Revenue: Payment is made by the government directly from tax revenue. This is known as single-payer health care, as seen in Canada.
Compulsory Contributions to Competing Insurance Funds: Legislation requires compulsory contributions to competing insurance funds. These funds must provide a minimum standard of coverage and are not allowed to discriminate between patients. The government establishes an equalization pool to spread risks between the various funds.
Contributions by Employers and Employees to Sickness Funds: Funds come from neither the government nor direct private payments. This system operates in countries such as Germany and Belgium.

These funds are usually non-profit institutions run solely for the benefit of their members.

The Basic Economics of National Health Insurance

Advantages of National Schemes

National schemes have the advantage that the pool or pools of contributors tend to be vast and reflective of the national population.

Health care costs tend to be high at the extremes of age and other specific events in life, such as during pregnancy and childbirth. In a national healthcare scheme, these costs are covered by contributions made to the pool over an individual's lifetime (i.e., higher when earning capacity is greatest to meet costs incurred at times when earning capacity is low or non-existent).

This differs from the private insurance schemes with contribution rates that vary year by year, according to health risks such as age, family history, previous illnesses, and height/weight ratios. Consequently, some people tend to have to pay more for their health insurance when they are sick or are least able to afford it.

Ghana's National Health Insurance Scheme (NHIS)

In 2004, Ghana rolled out its National Health Insurance Scheme (NHIS) to replace the prior ‘cash-and-carry’ system, in which healthcare costs were mostly covered through out-of-pocket payments (OOPs). The NHIS was designed with voluntary enrolment and no user fees at the point of healthcare delivery. For example, NHIS enrolees are supposed to receive healthcare for free at the point of delivery, yet frequent (catastrophic) OOPs are reported.

Health facilities charge out-of-pocket fees partly because claims reimbursement to the facilities is unpredictable and generally several months late. The National Health Insurance Authority (NHIA), which administers the NHIS, has been running financial deficits since 2010.

Among the reasons identified for the financial issues is the large benefits package. According to the NHIA, the current benefits package covers over 95% of disease conditions occurring in Ghana.

Out of the three dimensions of healthcare coverage that the World Health Organization identified, Ghana’s NHIS-with its large benefits package and pledge of no user fees-has historically concentrated on service coverage and cost coverage. Population coverage appears to have stagnated and hovered around 40% from 2015 to 2020.

Considering the aim of expanding population coverage and given the financial woes of the NHIS, policymakers have been discussing a review of the NHIS benefits package.

Current funding to the NHIS is insufficient to provide the historical benefits package, which promises to cover over 95% of disease conditions occurring in Ghana, to the total population. Shifting the NHIS focus from intervention coverage to population coverage is likely to lead to better health outcomes.

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The study employed cross-sectional national representative data. The frequency distribution of socio-demographics and health insurance coverage differentials among men and women is first presented.

About 66.0% of women and 52.6% of men were covered by health insurance. Wealth status determined insurance status, with poorest, poorer and middle-income groups being less likely to pay themselves for insurance.

Women never in union and widowed women were less likely to be covered relative to married women although this group was more likely to pay NHIS premiums themselves. Wealth status (poorest, poorer and middle-income) was associated with non-affordability as a reason for being not insured. Geographic disparities were also found.

Challenges and Sustainability

Although Ghana is lauded for its National Health Insurance Scheme (NHIS), concerns exist about the scheme’s functioning and sustainability. An often-cited issue-contributing to the scheme’s decreasing membership, long-standing financial deficit, and frequent out-of-pocket payments among members-is the large benefits package (BP).

While, on paper, the BP covers over 95% of the conditions occurring in Ghana, its design was not informed by any budget analysis, nor any systematic prioritization of interventions.

Provider Behavior and the NHIS

The NHIS promoted access for insured and mobilized revenue for health care providers. Both insured and uninsured were satisfied with care (survey finding). However, increased utilization of health care services by the insured leading to increased workloads for providers influenced their behavior towards the insured.

Most of the insured perceived and experienced long waiting times, verbal abuse, not being physically examined and discrimination in favor of the affluent and uninsured. The insured attributed their experience to the fact that they were not making immediate payments for services.

A core challenge of the NHIS was a delay in reimbursement which affected the operations of health facilities and hence influenced providers’ behavior as well. Providers preferred clients who would make instant payments for health care services. Few of the uninsured were utilizing health facilities and visit only in critical conditions. This is due to the increased cost of health care services under the NHIS.

The perceived opportunistic behavior of the insured by providers was responsible for the difference in the behavior of providers favoring the uninsured. Besides, the delay in reimbursement also accounted for providers’ negative attitude towards the insured.

Relevance of NHIS in Ghana

The study looks on the value of NHIS in Ghana. Therefore, the query “Is NHIS Relevant in Ghana?” was presented. 80% of respondents, according to data replies, concur that the plan is useful, this is shown Fig. 2. This is in line with a number of studies, including [22], which found that NHIS has increased access to healthcare in Ghana.

The NHIS is relevant to 71.10% of respondents, as seen in Fig. 2. According to the data, the NHIS is beneficial because it provides affordable healthcare services (43.8% of respondents).

Others claim that it is a source of income savings (12.5%), while another 12.5% claim that the NHIS is relevant because it is constitutional (see Table 9). The explanations given are understandable but conveniently adequate in light of research conducted by ref. [9], who discovered that NHIS is Ghana’s most cost-effective healthcare system.

This study looks at and seeks to support some of these assertions. 37.8% of respondents indicated that they thought the social program could fail. Figure 4 illustrates the great belief in the plan held by the remaining 62.2%.

For those who indicated failure in Fig. 4 argued that it is because NHIS is struggling and has already collapsed but for some fail because government is broke. These reasons are consistent and agree with earlier studies conducted on investigate the performance of the scheme (see Table 14).

According to studies, the NHIS is having financial difficulties as a result of the population growth. To put it another way, respondents are only reiterating that the plan may struggle but cannot fail.

The NHIS may be used for a number of things. This study explores whether respondents concur with some of the well-known reasons why individuals purchase insurance coverage. According to Table 10, 37.8% of the respondents concur that NHIS serves to lower the probability of a health impact should the risk arise.

For the remaining 31.1%, NHIS acts as a source of income for the payment of medical expenditures, while for others 26.7% it only provides safety and security in the event of a risk. According to the majority of research, the Social Health Insurance Scheme's (SHIS) main purpose is to protect the general public from the effects of risk in the event that the risk materializes [23].

On how whether risk management necessary for NHIS in Ghana, 68.8% of respondent agreed to it while 15.6% did not. The remaining 15.6% chose not to answer the question shown in Fig. 3. It reveals that 31.1% of respondents either didn't agree with the statement or chose to ignore it.

To put it another way, the expansion in NHIS participation is not primarily attributable to greater knowledge of its advantages. It might be explained by some people simply pursuing the crown to register for the NHIS.

Respondents were widely spread among various benefits, but 38.7% and 16.1%, respectively. This clearly indicates that risk management is important in minimizing the impact of NHIS failure and also helps in successful planning.

They give a variety of justifications. In the opinions of 57.1% of respondents, there is no risk associated with NHIS; for some respondents (28.6%), NHIS is government-protected; and for the remaining respondents (14.3%), NHIS is constitutional (see Table 13).

Even some scientists described it as a failure. This study looks at and seeks to support some of these assertions. 37.8% of respondents indicated that they thought the social program could fail. Figure 4 illustrates the great belief in the plan held by the remaining 62.2%.

As it is in Table 15, 25% of respondents believe that NHIS has reliable financial sources; 25% of respondents believe that NHIS is constitutional; and yet, for 14.3% of respondents, NHIS has no risk at all. The remainder population (35.7%) believed that the government supported NHIS.

In Table 2, we also observed geographical differences regarding NHIS coverage across regions among men and women.

Fig. 1NHIS coverage per regions segregated by sex

A quarter of men and women were not insured because of non-affordability of health insurance premiums (see Table 2). About 7.5% of uninsured men and 3.4% of uninsured women indicated they were uninsured because they did not trust the NHIS. About 21.4% of uninsured men and 10.8% of uninsured women mentioned they did not need health insurance.

Regarding payment for NHIS membership, about half of the men who were insured, paid themselves while about half of women who were insured, got insurance through payments from a friend or relative. About 0.4% of insured men and 4.2% of insured women were exempted from making direct premium payments to be enrolled under the NHIS.

Compared to men aged 30-34 years, men aged 15-19, 35-49 years and 45-49 years were more likely to be covered by health insurance (see Table 3). Among women, those aged 20-24 years were less likely to be covered for NHIS.

Women never in union and those widowed were less likely to be covered for health insurance, compared to married women respectively.

Women in Western, Volta, Eastern, Brong Ahafo, Northern, Upper East and the Upper West regions were significantly more likely to be covered by health insurance, compared to women in the Greater Accra region.