Book: Practical Working of the Health Insurance System in Nigeria
By Frank Chukwuka Osimi
June 4, 2019
Chapter 1- A brief history of the origin of health insurance system in the world
Health insurance is a form of insurance that covers and protects an insured (a person covered by insurance) against medical expenses incurred from treatment of an illness or disease. It is a healthcare programme or scheme that helps pay for medical expenses of an insured or health insurance enrollee.
A person covered by insurance is called an insured.
The saying that “health is wealth” remains valid universally. More so, it is important to add that health is not only wealth, it is also life.
When we protect out health, we also protect our lives.
Health insurance protects and insures health by taking care of the whole or part of the treatment bills or expenses arising from treatment of sickness and/or disease by an insured or health insurance enrollee.
Health insurance system is a system of health financing that insures or covers a national population against the costs of healthcare. It may be administered by the public sector, the private sector, or a combination of both.
Health insurance system is a health financing system that is designed to pool funds to provide access to quality affordable personal health services for all insureds, based on their health needs and policy plans or packages, irrespective of their socio-economic status.
A good or an ideal health insurance system should be designed and administered to ensure that the use of health services does not result in financial hardship especially for individuals and their families that are subscribed to it and also ensure that everything possible is done to achieve universal health coverage for all citizens and residents of a country where it operates.
Universal health coverage should ensure that every citizen and resident in a country should have a right to access comprehensive healthcare services at reduced or subsidized rate by the government of that country.
Historically speaking, what we call health insurance system in the world today, was bequeathed to her by the United States of America.
Health insurance system effectively started from 1850 (mid-19th century) in the United States of America.
According to the Yale Journal of Medicine & Law, the United States of America, the earliest forms of health insurance emerged in 1850 when the Franklin Health Assurance Company of Massachusetts began providing accident insurance to cover injuries related to railroad.
The Franklin Health Assurance Company of Massachusetts, the first health insurance company in the world, was a private company and it administered a private sector insurance practice.
National or government-monitored health insurance system started in Germany, Europe.
Germany has world’s oldest government-monitored health insurance and social welfare system in the world. It was created by the Health Insurance Act of 1883.
The Health Insurance Act of 1883 was an health insurance bill passed by the Imperial Senate of Germany under Chancellor Otto von Bismarck on 23 June 1883.
The program was established to provide health care for the largest segment of the Germanian workers. The health service was established on a local basis, with the cost divided between employers and the employed. The employers contributed 1/3rd, while the workers contributed 2/3rds.
According to Wikipedia, Otto Eduard Leopold, Prince of Bismarck, Duke of Lauenburg, known as Otto von Bismarck, was a conservative Prussian statesman who dominated German and European affairs from the 1860s until 1890 and was the first Chancellor of the German Empire between 1871 and 1890.
Let us move to Asia and the Pacific, at this juncture.
The origin of the Japanese Health care system (health insurance system) can be traced back to 1927 when the first Employee Health Insurance plan was created.
By 1961, Japan had achieved universal health insurance coverage, and almost everyone in the country became insured or covered by health insurance as a result of that great feat. Hospitals in Japan provided both out-patient and in-patient care.
Now to Africa.
Unlike what obtain in the United States of America and Germany, where their health insurance systems date back to over one hundred years, the evolution and development of health insurance systems of a number of African countries, is relatively more recent.
We consider those of Ghana and Nigeria briefly.
In Ghana, the National Health Insurance Scheme is a form of social intervention established by the Government of Ghana in the year 2003. The scheme provides equitable access and financial coverage for basic health care services to residents in Ghana.
The National Health Insurance Scheme of Ghana was created during the government of John Kufuor in 2003. Prior to that, Ghana had practised what health insurance experts and analysts called “cash and carry” system of healthcare delivery.
Upon becoming president, former president Kufuor pushed through his idea of getting rid of “cash and carry” system of healthcare delivery in the country and replacing it with an equitable insurance scheme that ensured that treatment was provided first before payment for Ghanaian citizens.
In 2003, the scheme was passed into law. Under the law, there was the establishment of Ghana National Health Insurance Authority which licenses, monitors and regulates the operation of health insurance schemes in Ghana. Like many countries in the world, Ghana’s health insurance was fashioned out to meet specific health needs of persons resident in Ghana.
The first move to create or establish government-monitored health insurance system in post-British Nigeria, was made in the year 1962. In that year, a minister of the government of Nigeria in Lagos, had proposed a bill aimed at establishing an health insurance scheme in Nigeria. Unfortunately, the proposal or bill did not see the light of the day due to strong resistance by some ‘critical’ stakeholders in the health care sector in Nigeria.
The National Health Insurance Scheme (NHIS) is the body that licenses, monitors and regulates the operation of health insurance system and practice in Nigeria, today.
The NHIS was created in May 1999 but did not become fully operational until during the second term or tenure of office by former President Olusegun Obasanjo in 2005.
Private health insurance practise had existed in Nigeria for years before the creation of the National Health Insurance Scheme (NHIS) in 1999, which eventually took off operation in 2005.
According to Bloomberg, Hygeia Nigeria Ltd, a private Health Management Organisation (HMO) was founded in 1984.
Another health insurance company in Nigeria, Total Health Trust Limited (THT), Health Maintenance Organization (HMO) was founded in 1997 and commenced operations in June 1998.
Health Management Organisation (HMO) is the name used for a private health insurance company in the United States of America, Nigeria and some other countries. .
There are many private Health Management Organisations (HMOs) operating in Nigeria, currently.
Generally speaking, HMOs provide health insurance services, such as corporate, retail, and SME plans and provide healthcare services to their enrollees, insureds or subscribers through healthcare providers (hospitals, clinics, diagnostics homes, specialists centres, etc,).
HMOs are monitored and regulated by the National Health Insurance Scheme (NHIS). The NHIS also monitors and regulates the health insurance system in Nigeria.
The key four stakeholders in the health insurance sector in Nigeria are the National Health Insurance System, the Health Management Organisations, healthcare providers and the enrollees or insureds.
Chapter 2 of this book examines the structure of health insurance system in Nigeria and the relationship and synergy that exist among the stakeholders listed above.
Frank Chukwuka Osimi is an Health Insurance Consultant and Manager. You may contact him on Facebook Messenger and on this blog for more information regarding the health insurance system in Nigeria.
Book: Practical Working of the Health Insurance System in Nigeria: Lessons from years of work experience of an health insurance customer service executive-By Frank, Chukwuka Osimi
Leave a Comment
Your email address will not be published.