The impact of health care insurance plans in Nigeria

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The need for the National Health Insurance Scheme (NHIS) in Nigeria came up as a result of poor health indices, high mortality rate, and poor state of healthcare services, excessive dependence on government health facilities, pressure on public health facilities and poor integration of private health facilities into the nation‟s healthcare delivery system (NHIS, 2012). National Health Insurance Scheme (NHIS) was first introduced to parliament in the year 1962 when the need for health insurance in the provision of health care to Nigerians was first recognized. It was fully approved by the federal government in 1997 and signed into law in 1999. The scheme was officially launched on the 6th of June, 2005.

National Health Insurance Scheme (NHIS) is a cooperate body under act 35 of 1999 by the Federal Government of Nigeria to improve the health of all Nigerians at affordable cost. The NHIS is a social security system in which the health care of employees in the formal sector is paid from funds created by pooling of contribution of employers and employees. Beneficiaries to the scheme include students of tertiary institutions.

The objectives of the NHIS scheme are to among others; ensure that every Nigerian has access to good health care services while protecting families from the financial hardship of medical bills. Under the scheme, health care providers, referred to as Health Maintenance Organizations (HMOs) are responsible for providing and making payments for all persons who have registered and have paid the required premium. To provide this service, the HMOS liaise with the accredited medical establishment of a person‟s choice (ABU, 2013). The rising cost of health care services and the need to provide quality, accessible and affordable health care services with the people‟s demand, necessitated the establishment of the national health insurance scheme (Omoruan, Bamidele and Philips, 2009).

NHIS was officially introduced in Edo State in September 2009 along with 24 states of the Nigeria although the programme was said to have made progress, it goal of 90 percent converge was excessively ambitious, especially in view of the economic strains in the Nigeria economy (NHIS, 2009). Edo state is faced with high population growth, ignorance, poor health facilities, poor nutrition, high rate of environmental pollution, superstitious belief and norms (Yohersor, 2004).

Prior to the establishment of NHIS several systems, ranging from free health care, out–of–pocket purchase, retainer ship, inbuilt health facilities within corporate organization to private health indemnity insurance have been in use. Many have lost their lives due to their inability to meet their health needs. Statistics have shown that about 70 percent of Nigerians pay out of pocket for their health-care needs (Agba, 2010). A situation, many countries have eliminated through health care financing.

This and many more are justification for health watchers the NHIS to function effectively. It is not surprising that agitation for an efficient and sustainable health insurance scheme in Nigeria has engaged government at all levels. Since the promulgation of National Health Insurance Scheme acts. No doubt, establishment of a health insurance scheme became imminent and the need to enlighten the general public on the importance of the scheme to ensure utilization and consequently achieving the Millennium Development goal as it pertains to health (Chikwe, 2013).


Health care financing has become important in the developing world, it has been implemented as part of health reform programmes and strategies aimed at providing effective and efficient health care for citizens, Health insurance schemes in many low and middle income countries, most especially in the African continent are still in their early stage of implementation with the goal of universal coverage of the population. In Nigeria, evidence shows that the knowledge and utilization of NHIS is still very low (NHIS, 2012).

Funding remains a major problem to the scheme, the percentage of government allocation to UN or WHO have always been about 2 percent to 3.5 percent of the national budget (James Robert and Jerome, 2008). In 1996 2.52 percent of the total national budget was spent on health, 2.99 percent was spent in 1998, 1.95 percent in 1999, 2.5 percent in 2000 and a marginal increase to 3.5 in 2004 (WHO, 2007). Also, in addition to the foreign issue facing NHIS (NISER, 2012) pointed out that some of its aspects still need improvement. The scheme covers only one percent of the nation‟s population, (the federal government workers) and its implementation were largely urban based and, the health benefits package are considered inadequate, as it excludes some life-threatening health challenges such as those related to kidney, heart and liver. NHIS drug list which enrollees stated excluded some essential prescription drugs due to cost considerations. Health facilities at some lower levels hospitals were reported inadequate in spite of the capitation funds paid to them for improvements.The dearth of facilities at a lower-level hospital was mentioned as a cause of high timed referrals, whose protocol under the scheme was considered as cumbersome by enrollees

In the year 2005, the Federal Government of Nigeria launched the National Health Insurance scheme as a policy for healthwith the optimism that the system will reduce the morbidity rate in our population and frequent outbreaks of preventable diseases. Since the introduction of the NHIS the impact of this strategy has not be known in Nigeria as a whole as well as in Edo State (Kannegisser, 2009).The general health condition in Edo State is poor as a result of social/environmental, malnutrition, morbidity, infectious and parasitic diseases, infant mortality, and lack of health care facilities (NHIS, 2009). Commencement of services to enrollees started in September 2005 and up to this time 4 million identity cards have been issued so far, 62 Health Maintenance Organization (HMO) have been accredited and registered and more applications are being processed (NHIS 2009). The establishment of NHIS Presently with 5,494 health care providers, 24 banks, 5 insurance companies and 3 insurance brokers have been accredited and registered. States that have so far shown their interest in NHIS as at 2006 are Rivers, Edo, Benue, Ekiti, AkwaIbom and Federal capital territory, while Cross River State has fully enrolled (NHIS 2006). NHIS in 2009 reported that the scheme is one of the fastest growing social health insurance schemes in the world. NHIS is a form of managed care that pool regular financial contribution of members and pay a net work of providers of health care for defined specific set of health care services, which are accountable for cost containment and improving health outcomes. A contribution entitles the insured person, the spouse and four children under the age of 18 years have access to health care after registering with an approve health maintenance organization (Akande and Bello, 2002). NHIS also captures those in tertiary institutions.


The programme for higher institution students have been approved by the Federal government, through this programme an estimated 48 million Nigerians will come on the

scheme, which is the first scheme in the world that has a specific programme for students (Kannegisser, 2009).

Several researches have been conducted on National Health Insurance Schemes. Tabor (2005) carried out a study on public health insurance in Northern Nigeria, the study reported that publicly insured children were more likely to have emergency department visit than un-insured children. Tabor examine insured public children were more likely to have access to NHIS facilities than the uninsured children. Agba (2010) using surveying design examined employee‟s access to health care services in Cross River State, and noted the existence of discrepancies among employees in their access to the NHIS. Federal civil servants have more access to the scheme in Cross River State than those of the State government and Local Government staff. The study emphasize on the impact of NHIS on each categories of urban and rural workers access to health care.

In addition, Osuchukwu and Ushie (2011) carried out a study on factors effecting the utilization of NHIS in Asaba in Delta state, Nigeria. Their study revealed that NHIS utilization is still low in Nigeria. The underutilization of NHIS service varies from region to region and from state to state. A cross-sectional study indentified (72.2%) of respondent utilize NHIS clinic, people in the urban area utilize the service than those in rural areas, the focus of this study was directed on factors affecting the utilization of NHIS services in Delta state.

Oriakhi and Onemolease (2012), using multiple stage sample procedure, examined knowledge and willingness to participate in community based health insurance scheme in Edo State, Nigeria. Their findings show that about 60 percent of the respondents indicated willingness to participate in the community based health insurance scheme, 21.7% were not willing to participate, while 18.9 percent were unsure. The fact that majority indicated willingness to participate in community based health, suggest that the scheme has prospects.

Studies such as Tanimole (2011), Adekunle and Oluwole (2012) among others, examined the effects of NHIS utilization at university of Ilorin (UNILORIN) Teaching Hospital Staff Clinic. The result shows that NHIS led to 144 percent increase in the utilization of health services in Kwara State and a total of 29,422 patients were seen in the period under preview. Mean attendance per month before and after the commencement of NHIS was 357 and 870 respectively.

Mensah (2010) examined the impact of NHIS on pregnant women in Oporoma, Bayelsa State. The study found out that pregnant women who participated in the scheme enjoyed reduced incidents of birth complications as they are more likely to receive pre-natal care, deliver at a hospital and are attended to by a trained health professional during birth. In Edo state the NHIS has been in use for some years now but the evaluation of the level of awareness is rarely documented. This is the basic for this studies. The research will attempt answers to the following questions


  1. What is the awareness level of NHIS in the study area?
  2. What is the level of utilization of NHIS in the study area?
  • What are the nature and conditions of NHIS facilities in the area?
  1. What are the factors that influence the awareness and utilization of NHIS in Edo State?


The aim of this study is to assess the impact of health care insurance plan in Nigeria. In order to achieve this aim, the following specific objectives will be pursued, to

  1. examine the awareness level of NHIS in the study area
  2. determine the utilization level of NHIS in the study area
  • identify and characterized the type of existing health care facilities in the study area.
  1. examine the factors that determine access and utilization of NHIS in the study area



Based on the question and objectives of the study the following hypothesis is put forward:-

  1. There is no significant difference in the access and utilization of NHIS by socio-economic sub-groups.
  2. There is significant difference in awareness and utilization of NHIS by socio-economic sub-group.


Edo is made up of 18 Local Government Areas, but for the purpose of this study 3 LGAs were systematically selected for detailed study. These LGAs are Akoko Edo, Esan West and Uhunmwode. Where one LGA was sampled from each senatorial district, the selection is based on the LGAs with the highest number of health care facilities and also represents the attributes of the state, the survey includes public/civil servant, farmers, fulltime house wives and traders within the selected Local Governments Areas of Edo State. The study covers the period of 2005 to 2013.

1.6        Significance of the Study


The major reasons for undertaking this study is that it will provide insight into health care system and provide basic information about National Health Insurance Scheme for policy planning to the people of Edo state, the finding of this research work are expected to constitute valuable source of data for future references and planning and provision of health care facilities where they are lacking.

The awareness and utilization of NHIS is an important health indicator, awareness and utilization of these services has taken decline trend over the years. NHIS is a fundamental pillar for sustainable development in many developing countries including Nigeria, there is high mortality rate as a result of inadequate awareness and utilization of NHIS.

Studies of this type have the potential to reveal the problems confronting health care, benefit and pave ways for policy makers, the local government, the state government, the federal government as well as research institutions and nongovernmental organization NGOs. It will serve as a framework for assessing the development and level of awareness and utilization of national health insurance scheme in these areas by the government. It will help to known area that are affected by lack of NHIS facilities, utilization of the facilities it will help to draw attention for what is needed during budgets and other developmental projects.




NHIS – is a mechanism, which enables the burden of the direct cost of health care to an individual to be spread among a group of people who share the risk and over a period of time rather than being met at the point of delivery by a single individual.

Utilization is a integral part of managed care, health plans designed to control and limit medical expenses.

Awareness – is a state or ability to perceive, to feel or to be conscious of events, objects, or sensory patterns. In this level of consciousness, an observer can confirm sense data without necessary implying understand more broadly.

Health Insurance – Is a system of advance financing of medical expenses through contribution, or premium paid into a common fund, to pay for all or part of health services specified in an insurance policy or plan.

Health Care – Refers to the work done in providing primary care, secondary care, and tertiary care as well as in public health

Nick sharing in health care – is about humans taking care of other humans recognizing need for enhanced information around clinical and operational best processes, created and implemented


HMO Health Maintenance Organization
WHO World Health Organization
UN United Nations
NHS National Health Service
NISER – Nigeria Institute of Social and Economic Research



This thesis is made up of six chapters and the chapters are arranged to enable each chapter properly ties to the next.


Chapter one is the background of the problem and high lights the need for the study. The discussion in this chapter includes the listing of the aim and objective, statement of

research problem, research questions, scope and the study, justification of the study and explanatory notes on some terms.


Chapter two reviews some of the relevant literature. The literature is reviewed in such a way that only the findings of the studies and method used are mentioned.

Chapter three focuses on the study area and properly discussed the location, relief and drainage, climate, soil and vegetation, historical growth, population, settlement, transportation system, traditional craft and modern industries, agriculture and health care facilities. The chapter also deals with the methodology that is used in this study, high lighting the types and sources of data analysis.

Chapter 4 focuses on the results, discussions, and analysis of respondents

Chapter five focuses on cross-tabulation and discussion of the factors that determine awareness and utilization of NHIS services

Chapter 6 includes summary, recommendation, and conclusion.


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