CEM REPORT, HEALTH | The health insurance sector in Nigeria might be on the verge of a standoff between the government and the private sector.
This will be propelled by proposal by the Lagos State Health Management Agency (LASHMA) for Health Maintenance Organisations (HMOs) to remit 13 per cent of the premiums charged as “social health plan contributions” to the agency.
The Lagos State government in a bid to implement the universal health coverage goal of the National Health Insurance Authority (NHIA) Act 2022 directed HMOs to move their clients from the organised private sector to the state’s scheme.
HMOs are opposing the state’s proposal to transfer the management of Ilera-Eko, the state-owned health scheme to them and charge a levy on enrollee premiums.
“A minimum of N30,000 would be applied for all private health plans, and HMOs are expected to remit social health plan contributions in respect of all lives registered in Lagos State. This will therefore be 13 per cent of 30,000 for all residents of Lagos State on private plans, for November and December 2022,” the document read.
“With effect from January 2023, social health plan contributions will be charged at 13 per cent of the actual premiums paid on all private plans written in each quarter and would be due by the 15th of the first month of the new quarter while late payments will attract penalties,” BusinessDay reports.
The action of the Lagos State government goes against an order to hold off on any regulation concerning private insurers until engagement and mutual consultations with all stakeholders are completed.
As of July 2023, about 756,000 out of the estimated 26 million residents of Lagos have been enrolled in the Ilera Eko scheme, nine years after it was launched.
The Nigeria Employers’ Consultative Association (NECA) has also advised the state to hold off on implementing the Act until the NHIA guidelines are released so that businesses may more easily understand how to embrace it.
“While we note the LASHMA role and the law establishing it, it does not supersede nor can it override the NHIA. The Authority had advised all stakeholders, including LASHMA, to hold on for the NHIA regulation to be released to guide the operationalisation of the Health Insurance Scheme. Therefore, the purported directive by the LASHMA as regards Ilera Eko is premature and of no effect, in view of the advice by the NHIA,” Adewale Smatt-Oyerinde, NECA Director-General, said.
Before the revised Act went into effect, HMOs were free to offer bare minimum packages to their customers.
However, under the existing order, they are only permitted to provide supplemental services. When contracted, they can also operate as third-party administrators to aid the implementation of state health plans, or they can execute responsibilities mandated by the NHIA.
Only states and the Federal Capital Territory have the authority to provide a minimal minimum package of care to all inhabitants via their health insurance and contributing schemes.
The Act’s subsections 1 and 2 of section 14 have made obtaining health insurance a requirement for all Nigerians. Employers and employees in the public and private sectors, as well as those in the informal sector, must get insurance.