Universal Health Coverage: how health insurance may help

In as much as health insurance shows great promise in improving financial access to healthcare, its ability to promote fairness (equity) is limited by the economic capacity of the population. For this reason, national health insurance programmes in many sub-Saharan African counties have only succeeded in reaching a relatively small formal sector, while community-based pre-payment schemes targeting rural and urban low-income households are yet to be scaled-up for impact.

Theoretically, there is an assumption that it is possible to attain universal health coverage (UHC) by making health insurance coverage mandatory. While this is yet to be fully tested even with the ongoing experiments in the United States of America with ‘Obamacare’, and several tiers of coverage in Indonesia – there is great anticipation for such a policy to be true and thus a high demand for it even in Nigeria. But as health insurance systems involve a highly complex combination of incentives to providers, consumers and third-party fund holders; mandatory health insurance coverage will necessarily require a ‘market for health insurance with some regulation’. This is to ensure that while the beneficial effects of universal access to care are being extracted, the unintended detrimental consequences of lack of equity and inefficiency are modulated.

And critical to success, is to ensure that access to health insurance is not dependent on income, by identifying those for whom premiums need to be fully paid for or subsidised. Apart from having local government agencies or community-based organisations to be well organised and have the skills to implement prospective means tests of the population, there needs to be a proper role re-definition of public sector (government) away from direct implementation to oversight of the system. While guarding against corruption and rent-seeking for example in Nigeria, this role could entail: defining a cost-effective package of standard minimum benefits that must be covered in all insurance plans; supplying information to consumers regarding their choices; subsidising (or fully paying) the premiums of low-income groups; and regulating the activities of health insurance companies or agencies which may be for-profit or non-profit. The market for mobile telephoning that is accessible to all socio-economic and demographic groups, where the Nigerian Communications Commission plays this public sector role effectively provides a good model for practice ◊◊◊