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Why Insurance Is Still Undermined In Nigeria: Emphasis On Nigerian Health Insurance

Why Insurance Is Still Undermined In Nigeria: Emphasis On Nigerian Health Insurance


At the Annual General Meeting/ Scientific Conference Benin 2019 of the Association of Resident Doctors UBTH, Health insurance was re-emphasized for the citizenship of the country. Just before then, I had been observing the state of insurance in Nigeria.
There are many insurance companies in the country but they welcome very little participation from the populace.

The keynote speaker, Prof. Dominic Osaghae(Consultant Paediatrician, Dean School of Medicine, Igbinedion University, Okada), at the conference keenly emphasized on the need for Health Insurance as specified in the United Nations Sustainable Development Goal 3(SDG-3).



Insurance services generally aim to emancipate or reduce the effects of accidents, hazards and natural and artificial disasters on individuals' pockets. And specifically for the health sector, the keynote speaker gave 2 aims of the SDG 3.
He stated the following targets:
  • Universal Health Coverage
  • Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all.
  • Social Protection
  • The keynote speaker described social protection as the prevention of out-of-pocket payment for health services, to the extent that it drastically affects the financial status of the individual. High out-of-pocket payments discourage hospital visits and in turn militate against the Universal Health Coverage goal.

There are other targets or objectives of the SDG-3 but the one insurance tries to address is Universal health coverage, whereby there is financial risk protection and access to quality essential health care for everyone. Many nations of the world now have a well-established insurance system with massive registration from a majority of the populace. In such places, the goal of universal health coverage is achieved to a very great extent.
However, in countries like Nigeria, the insurance is still undermined by the people for several factors. In these climes, only a few are still able to access health insurance and hence the problem of universal health coverage is not completely solved.

Statistically, the keynote speaker added that about 100 million people are pushed into extreme poverty following expenditure on health services, and another 800 million people and families spend 10% of household budgeting on health services only. In spite of this, what can be done?
He further recommended that the National Ministry of Health should consolidate her effort in choosing priority diseases for the local population, universalize health care services by removing all obstacles that stand on the way for efficient health care delivery for all categories of people.


The National Health Insurance Scheme(NHIS) was established in 2004 under Act 35 of the 1999 Constitution of the Federal Government of Nigeria with the aims of;
  • To ensure that every Nigerian has access to good health care services. 
  • To protect families from the financial hardship of huge medical bills. 
  • To limit the rise in the cost of health care services. 
  • To ensure equitable distribution of health care costs among different income groups. 
The scheme was created in line with the SDG-3 goal for universal health for all and it tries to make insurance services available and more affordable for all categories including the formal sector, informal sector and vulnerable groups.

What are the possible factors behind very low health insurance participation in Nigeria? We hope to spell out only a few in the subsequent sections. Understanding this will not only allow us to know why health insurance is undermined but it will give us an insight on how to address these issues.

1. High Premiums

A health insurance premium is an upfront payment made on behalf of an individual or family in order to keep their health insurance policy active such that they are able to receive insurance-covered health care when necessary. This is usually paid every month whether or not they receive health services within that period.
In Nigeria, the premiums paid for insurance are not quite huge amounts but the low per-capita income of the average Nigerian makes the premium relatively high.
It is a universal feeling for people to feel that their premium is being wasted when there is no legal need to utilize insurance funds for health care. That is to say, when they are not ill, the average person thinks there is no need for maintaining the insurance registration and could consider discontinuing payment of premiums. This is a major reason for the undermined state of insurance in Nigeria.
The average Nigerian would not visit the hospital for "seemingly small" medical conditions even when their insurance registration is still active.

2. Poor Accessibility To Health Facilities

Insurance covers for the delivery of health care over the period for which the insurance policy is still active. If accessibility to health care services is not at best optimum, health care delivery will dependently be sub-optimal.
Whether insurance is active or not, a failing health care delivery will still discourage people from visiting the hospital when they have some health-related problems. Because they cannot access efficient health services at the right time, they would prefer to pay out of pocket so that they can more flexible on where to or not receive health care, even to facilities where insurance services may not be supported. This then discourages the participation of citizens in insurance.

3. Limited Hospitals With Insurance Coverage

Universality is compromised when either of two things is true. Either health services are sub-optimal in the face of a functional insurance policy or if not all hospitals and health facilities support one or another insurance policy.
People in need of health care would have to travel long distances to access insurance health facilities that their insurance policy covers. Receiving health care at other unaccredited centres may be rendered void or at best scenario, the policy permits the transfer of the bills anyway. But these may directly or indirectly affect users participation in the health insurance scheme.


4. Limited Coverage of Insurance

The best and most affordable insurance service in Nigeria is the NHIS but it has strict policies that limit the health care coverage.
For example, it categorically states that upon registration of a family, only the parents and four of the children are eligible to be covered for health services. Another example is the limitation of the number of days on admission that the insurance can cover for. There is also a limitation to the medical tests/investigations that can be covered.
The policy clearly stated these limitations such that when the limits have been reached, you unashamedly admit that there is nothing more anyone can do. So you are forced to continue receiving treatment out-of-pocket.


5. The Mindset of Natural Protection

Health care services in Nigeria cannot be said to be at its best. Though there are competent hands, at least when compared to their counterparts in other parts of the world, health facilities are poorly equipped and doctors and other health staff are under-numbered. The working conditions are not favourable but the doctor-patient ratio remains overwhelmingly high.
This makes health care delivery really difficult and inaccessible to the average Nigerian. In order not to face the stress and rigour of seeing a doctor, they would prefer to defer hospital visits or more easily, get over the counter medications for their ailments. They would only present when the disease has reached advanced stages that cannot be managed by non-specialists.

For the SDG 3 not to be defeated, and for universal health coverage to be nullified, there should be ways to encourage participation in health insurance. That means that some of these problems must be addressed and awareness is created to ensure maximum participation in health insurance. Man countries of the world have more efficient health service delivery and this we may attribute to the provision of health insurance to each and everyone that may be considered a citizen or someone who is currently subscribed for health insurance.

 From the Annual General Meeting of the ARD, UBTH, the keynote speaker mentioned some of these things already. And one which I must not fail to mention is the one that urges the ministry of health to choose priority diseases for the local population for easy distribution of health services.

Prosper Yole

I am a lifestyle blogger, I write useful articles on successful life tips and hacks. Posts bearing Prosper Yole as author are either written by the blog author himself or by our various other contributors. Thank you for reading through. I look forward to having you more often. Please subscribe to my feeds below...

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