Health coverage is one of the areas most primed for growth in Nigeria’s insurance sector in the near future. Nigeria is working towards a goal of universal health care, and the responsibilities for realising this goal are distributed throughout multiple levels of government. New initiatives are expected to boost coverage and understanding of how health insurance can help mitigate risks, and private sector operators hope that this increase in awareness will drive growth in elective coverages. In 2017 health care spending was estimated at 3.42% of GDP, or $12.9bn. Of this expenditure, 41.8% was for outpatient care, which is the largest segment by market share. Expenditure on a per capita basis is around $64.30 per person and is expected to increase.
At the federal level, the National Health Insurance Scheme (NHIS) covers federal workers, those working for private sector companies with 10 or more employees, and members of the military and police. State workers contribute 5.25% of their salary, employers pay 3.5% and the balance is deducted from salaries. Health maintenance organisations (HMOs) are registered by the NHIS as facilitators, receiving and collecting contributions, paying health care providers for services and providing quality assurance. The NHIS website lists 60 HMOs operating on a national basis or in specific regions or states, as well as one dedicated to military users. The first HMO, Hygeia, was established in 1986, and remains the largest of its kind in the market.
In 2017 Oyo State became the first in Nigeria to introduce universal health coverage. Enrolment is mandatory for all, and there are thresholds for financial contributions without any penalties for non-participation. Pregnant women, children and those deemed vulnerable get free access. Otherwise, contributions are set at N650 ($2.10) per month, with rebates and other cost reductions available for groups and family plans. Lagos State, the country’s largest urban area and home to its biggest population of health workers, is planning its own health insurance scheme, and other states are in the process of following suit. The plan thus far includes primary and preventive care, in addition to access to advanced services from both public and private sector providers. Premiums will range from between N8500 ($27.48) for individuals to N40,000 ($129.32) for families of up to six. The Lagos State Health Fund was established to pool capital and cover costs for people who have difficulties meeting premium costs on their own. Jide Idris, Lagos State commissioner for health, advised local media that the plan was to gather funding from various sources in order to ensure access for those who cannot afford it. “This means they will no longer have to dig their hands into their pockets to pay for health care,” he said.
At about 19% of the whole, public sector schemes continue to make up a minority of overall spending on health care. The rest is comprised of out-of-pocket expenditures in private transactions, often by people who already have access to the state system but wish to use advanced or exclusive facilities. Typically, these insurance coverages are offered as part of an employee’s benefits package. This type of coverage accounted for about 80% of the market in 2017, with the remainder composed of policies sold to individual users. At Hygeia, plans in this market segment start at N23,000 ($74.76). Policies are often targeted at niche consumers with a discretionary income, who have the ability to fly to international medical centres, pay for fertility treatments and top-up plans that boost coverage levels provided by state schemes. Consumers can also purchase increased coverage levels and increased access to private hospitals. In the informal market, as many as 50m customers may be able to afford basic coverage that protects them against insolvency in the unfortunate case of a medical emergency.
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