An Evaluation of the Problem Facing National Health Insurance Scheme in Nigeria

An Evaluation of the Problem Facing National Health Insurance Scheme in Nigeria



1.1 Background of the study

This study evaluates one of the cardinal objectives of good governance which is to have effective healthcare delivery system put in place for the entire citizens. A healthy nation is a wealthy nation because of the absence of debilitating diseases and epidemics in such a country, which, along with hunger and squalor, impoverishes the citizenry (Nwatu, 2000:12).

The national health insurance scheme (NHIS) functions as a social health insurance program designed by the federal government of Nigeria to improve every services related to financial health sector, and to improve access of health care for the majority of Nigeria. The evolution of the National Health Insurance scheme details back to 1962, when the need for health insurance in the provision of health care to Nigeria citizen was first announced. Furthermore, the introduction of the structural adjustment program in 1986 adversely affected health allocation and other factors that led to the introduction of the national health insurance scheme. This general poor stated of the nation’s health care services is giving the government a lot of concern. The concept of social health insurance was first mooted in 1962 by Heuvi committee, which passed the proposal through the Lagos health bill. Unfortunately it was truncated in 1985, Dr. Emmanuel Usman, the minister of health set up a committee on national health review led by Mr. L. Ligailu.  At its 42nd meeting, the national council on health (NCH) approved the NIS to ensure full private sector participation. This model ensured the introduction of health maintenance organization (HMO) and financial managers of the scheme. On October 15th the national health insurance scheme was finally launched.

In the developed world, insurance in one form or the other is a veritable and sustainable tool for financing healthcare. The National Health Insurance (NHIS) was launched in Nigerian on October 15, 1997 and was passed into law in May 1999. The original scheme has been modified to include healthcare for less privileged persons in the country (FMH, 1998). According to the World Health Organization (WHO) in 2005, Nigeria was ranked 197th out of 2000 nations; life expectancy was put at 48 years for male and 50 years for female while healthy life expectancy (HALE) for both sexes was put at 42 years. Nigeria accounts for 10% of global maternal mortality with 59,000 women dying annually from pregnancy and child birth; only 39% are delivered by skilled health professionals. In order to provide equitable distribution of health, the NHIS was introduced in Nigeria The need for the establishment of the scheme was informed by the general poor state of the nation’s healthcare services, excessive dependence and pressure on the government’s provision of health facilities, dwindling funding of health care in the face of rising cost, poor integration of private health facilities in the nation’s healthcare delivery system and overwhelming dependence on out-of-pocket expenses to purchase health. Like any other insurance scheme, the premium for the NHIS is the amount charged by the insurance compared with the promise to pay for any eventual “covered medical treatment” for the designated “coverage”. Consequently health insurance makes it possible to substitute a small but certain cost for a larger but uncertain loss (chain) under an arrangement in which the healthy majority compensate for the risks and costs of the unfortunate ill minority. The NHIS currently represents 15% of one’s basic salary. The employer is to pay 10% while the employee contributes 5% of his/her basic salary to enjoy healthcare benefits. The contribution made by the insured person entitles his/her spouse and four children under the age of 18 to full health benefits (FMH 2005) NHIS was designed to provide minimum economic security for workers with regard to unfavorable losses resulting from accidental injury, sickness, old age unemployment and premature death of family wage earner. NHIS is made compulsory because the government based on past experiences predicted that some citizens cannot engage in the scheme and the government also has the duty to protect the general welfare of all citizens (Ibiwoye and Adedeke, 2007). It is also the government’s belief that NHIS will help to break the vicious cycle of poverty in the country. It is also a form of social support for workers (Jutting, 2003). There is lack of health care coverage and little equity. Access to healthcare is limited and most Nigerians are unable to pay for health services and health facilities are far from being equitably distributed. All these contributed to the limitation in health services (Samin and Awe, 2009). The available health services are very expensive and the common man cannot afford it; only the privileged few can get access to good health. This study aims at assessing the level of knowledge and attitude of civil servants resident in Nigeria to NHIS.

According to Abacha (1985:3), the public hospitals had become (consulting clinics” Given the rapid population growth rate, what the nation needed was a commensurate increasing level of the services. But the decreasing finance of the government oil left the government with no other choice than reducing budgetary allocation to the health sector (Ozuh, 2004:30) prior to the government almost solely financed health services in public health institutions. But by the turn of the 1980s, it had become joint responsibility of the government and the citizens (Ughamadu, 2003:23). In other words both the government and the citizens shared the costs of healthcare services in public health institutions with the greater burden weighing heavily on the government. Subsidization of healthcare services was paramount in healthcare budgetary allocation.


In Nigeria, health insurance scheme is new; the target of its introduction is to achieve good health to all citizens in Nigeria. Most of Nigeria are unemployed, resident in the rural areas without hospital, water and infrastructure and inadequate personnel.

The researcher intend to cross-examine the strategies to be used in marketing health insurance in the situation of poor infrastructural development, unemployment and how level of income or capital and to indemnify what will be the inability factor in marketing health insurance scheme in Nigeria. To make suggestions to the government on the best way to market health insurance policies with the rural support, private sectors and non-governmental organizations.


The main objective of the study is to examine the evaluation of the problem facing national health insurance scheme in Nigeria.

Specifically, the study intend to;

i)  To evaluate the problems facing national health insurance scheme in Nigeria.

ii)   Examine the benefits and problems of the scheme

iii)  Examine the goals of the scheme

iv)  Examine the roles of the operators of the scheme.

v) Identify various methods to be used in marketing health insurance service in Nigeria


For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: there is no significant problem facing national health insurance scheme in Nigeria

H1: there are significant problems facing national health insurance scheme in Nigeria

H02: there is no significant relationship between the health insurance scheme and the Nigeria government.

H2:  there is a significant relationship between the health insurance scheme and the Nigeria government.


It is believed that at the completion of the study, the findings will be of benefit to the; Federal Ministry of Health, National Health Insurance Scheme Council (NHISC) to identify all the constraints to effective implementation of the scheme. The regulatory aspect of these challenges will be established in this study so that the NHISC will take remedial measures. To the Health Maintenance Organization (HMOs) as it will not only highlight the challenges facing them under the scheme but will also provide useful information on how they can effectively address these challenges especially those arising from their internal constituencies. To the Health Services Providers (HSPs), as those already operating under the scheme will be provided with useful information on how to brace up with their challenges while those not yet operating under the scheme will find in this study the need to be integrated into the national healthcare delivery system via the NHIS. To the government as the recommendations in this study will also be useful for its policy review in respect of the scheme.


The scope of the study covers the evaluation of the problem facing health insurance scheme in Nigeria. In the course of the study, the researcher encounters some constrain which limited the scope of the study;

Time: the time at the disposal of the researcher which was allocated for the study was a major limitation as the researcher had to combine other academic activities with the study.

Finance: The finance at the disposal of the researcher in the course of the study could not permit wider coverage as resources are very limited as the researcher has other academic bills to cover.

Availability of research material: The research materials available to the researcher at the time of this study were insufficient, thereby limiting the study.


EVALUATION: the making of a judgment about the amount, number, or value of something; assessment.

HEALTH: Health is the level of functional and metabolic efficiency of a living organism. In humans it is the ability of individuals or communities to adapt and self-manage.

INSURANCE: Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

HEALTH INSURANCE: Health insurance is a type of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses depending on the type of health.

The National Health Insurance Scheme (NHIS): is a body corporate established under Act 35 of 1999 Constitution by the Federal Government of Nigeria to improve the health of all Nigerians at an affordable cost through various prepayment systems.

Health Service Providers:- This refers to any health institution (hospital, health centers clinics, etc) authorized to provide healthcare service under the NHIS (Ozuh, 2004:30).

Health Maintenance organizations (HMOs):- This refers to any authorized body or organization to administer the NHIS by liaising between the NHISC and HSPs (Ozuh, 2004:30).

Healthcare Delivery System: – This refers to the provision of health service to the people (Ughanmadu, 2003:23).

HMOs is an acronym for Health maintenance organizations (Uduma, 2005:3) 6. HSPs an acronym for Health Service Providers (Uduma, 2005:3)