A popular adage says that a healthy person is a wealthy person. Mfon (2005:21) expresses that a nation with an effective healthy care system is a wealthy nation and is development oriented in the social context. One of the basic needs of the people of any nation is good health. This incorporates physical fitness, adequate nutrition and food security, high life expectancy, absence of adequate and endemic disease and efficient health care service delivery. In Nigeria, however, the healthy situation is a manifestation of malnutrition, low life expectancy of the majority, high incidence of epidemic and endemic disease as well as inefficiency healthcare service delivery.

It has been emphasis that no meaningful development can take place in the country if the greater proportion of the population have no access to effective health care services and live in squat or and disease.

According to Omoruan, Bemidelle & Philips (2009:2) every government in Nigeria holds the view that a healthy population is essential for rapid socio-economic development of the country hence healthcare is on the concurrent list in the Nigerian constitution and its allocation comes next to education and defense in the national budget. Despite the large population, social services including health car services are inadequate coupled with several challenges facing the system. Various reforms programmes have been put forward and government has expressed it determination to pursue a bold reform of the system.

Thus, in May 1999 the government created the National Health Insurance Scheme (NHIS) by enacting into law Decree No. 35 on 10th May 1999, (now Act 35 of 1999) the scheme encompasses government employee, the organized private sector and the informal sector. Legislative wise, the scheme also covers children under five, permanently disabled persons and prison inmates.

Thus, when Obasanjo administration came into being on May, 29 1999, the nation’s health sector was near comatose. Hospitals were in bad shape community an inter-sectoral collaboration was minimal (Adiekwe, 2009:2). Ugbaja (2007:19) remarks that resources devoted to this vital social services were insufficient. Worst still, there was out right, inadequacy of drugs and other consumables in most government health facilities. There was also paucity of qualified manpower in the government hospitals. The available motivated while facilities and equipment were poorly maintained.

Other lapses of the past include inadequate manpower development to meet modern trend and improper monitoring of services rendered t the public among others.

The National Health Insurance Scheme initiative was kept alive by Chief Olusegun Obasanjo the successor of Abubakar as a democratic president by further giving more legislative powers to the shame in 2004 with positive amendments to the original 1999 legislation. Implementation was however delayed till June 6th, 2005 (NHIS, 2005).


Organizational capacity in the management of an insurance based healthcare service is lacking at all levels of operation – health facilities (providers), Health Maintenance Organizations (HMOs) i.e. third administrators and council of NHIS (regulators). The skill              gap range from basic understanding and application to competencies in day-to-day business operations.

Care Net Nigeria (2011) captured it as follows:

Healthcare Providers – Especially General Practitioners (GPs) although very supportive of the NHIS, have been expressing their dissatisfaction with the way the scheme has been implemented. To start with, they find it quite absurd for secondary and tertiary  hospitals such as State General Hospitals, Federal Medical Centres  and Teaching Hospitals to be accredited as primary providers. This action leaves frontline GPs with very few enrollees that make the pooling of costs as against the capitation received impossible.         General Medical Practitioners also complain of high handedness of HMOs in their dealings with them. The main issues include arbitrary setting of capitation rates, which are very low and inconsistency in their payments; and poor communication. The providers attribute this behavior of HNOs to weak regulatory capacity. From what one           might call cat and dog fight’, the relationship between providers and HMOs in some instance degenerated to a complete backlash              against HMPs by providers.

Health Maintenance Organizations (HMOs) – Like to pride themselves as having pre-dated the National Health Insurance Scheme, but up until this moment they have failed to effectively carry out the functions assigned to them within the framework of the NHIS. HMOs were expected to mobilize contributors to the scheme, set up health funds and creatively expand coverage through market segmentation to reach a greater proportion of the population. At best many of them only act as ‘third party administrators’ rather than as vehicles for integrating the financing and provision of health care. The main functional programme covering Federal level employees of the government ahs attracted all manner of persons and organizations – from retired civil servants, banks, insurance and companies and politicians – to set up HMOs in order to have a piece of the pie. Otherwise, how come there are well over 50 HMOs catering for just 4 million beneficiaries, while the vast majority of the population (about 150 million) are without any form of cover. This state of affairs added to the myriads of capacity issues of HMos has also been largely attributed to the weak regulatory framework of the NHIS. Meanwhile there are a few progressive HMOs that are maturing into significant corporate entities fit for purpose.

The Council of the NHIS As regulator has failed to recognize its appropriate role, while blaming the inadequacies of the existing regulatory framework. In effect it helped to perpetuate the lack of understanding of the institutional arrangements within the system of health insurance that has been put in place. What is commonly now referred to as NHIS (that is, the organization) is actually the Council of NHIS – similar to other bodies such as the Medical and Dental Council of Nigeria, the Nursing and Midwifery Council of Nigeria and so on. Because in reality the National Health Insurance Scheme in Nigeria is the system of health insurance, which is backed by Decree 35 of 1999 consisting of a regulator, health plans or health funds, programmes and operators. Contrary to claims by the operators, you do not have to change the name of an existing regulator  from that of a Council to a Commission for it to do its job. The said Decree is unambiguous about this and repeatedly referred to the Council of NHIS in its provisions. It the meantime, this lack of understanding by the implementers has led the Council of NHIS to transform itself into something else. In the course of the implementation of the NHIS, the Council has assumed several functions, including mobilization of funds and registration of enrollees that should have been done by HMOs, and therefore not able to undertake its expected oversight duty.

        It is also interesting to note that funds disbursement to providers out of the 15% contribution by participants is based on fixed ratios. Accordingly, 10% goes to service delivery, 20% each is respectively of HMO and NHIS cost of operations, while the balance of 1% is set-aside in a reserve fund. This translates to 67% of the premium being spent on service delivery, 22% spend on administrative charges and 11% set-aside for the reserve fund. Clearly the administrative cost is very high and compares poorly with 5-15% of premium recorded in other countries where health insurance is well established and considered as good practice. It is not clear how these proportions were determined. It is also not clear how the expenditure pattern will be monitored so as to ensure that only payments for service rendered will be deducted.


(1)    How effectively is National Health Insurance Scheme being managed to ensure the success of the scheme.

(2)    To establish how many people are benefiting from the scheme in a vast country such as Nigeria.

(3)    To determine what practical actions should be taken to rapidly scale-up mechanisms that would protect the vast majority of the population from the financial difficulties when accessing health care service in line with the essential package care.


        The study will be useful to the following (1) National Health Insurance Scheme Council (NHISC) the regulatory body of NHIS will find the study useful. This is because it will identify all the constraints to effectively implementation of the scheme.

        It will enlighten majority of Nigeria on the need to be protected from the financial risk of ill-health through NHIS. This will increase the number of enrollee to the scheme, thereby increasing the pool of fund available to work with and provide financial risk protection for essential healthcare, for the entire Nigerians. To the academic world, this work will increase their store of knowledge and also inspire further research into the topic.


        The researcher is set to address. The following problems:

(1)    Will National Insurance Scheme ensure access to quality health care for Nigerians?

(2)    How many Nigerians are benefiting from the scheme?

(3)    How is the National Health Insurance Scheme being funded?

(4)    How far has the scheme impacted on the Nigeria health sector?


Ho:    The NHIS does not ensure access to good health care at limited cost.

Hi:    The NHIS ensure access to good health care at limited cost.

Ho:    The NHIS has high population coverage.

Hi:    The NHIS ha extremely low population coverage.

Ho:    The NHIS has not improved the nation’s healthcare facilities.

Hi:    The NHIS has improved the nation’s healthcare facilities.


        This study focuses on the management of NHIS in Nigeria. However, the scope covers the scheme as it is administered both in the public and private sector.


        In the processes of this work the researcher encountered a number of obstacles which includes the uncooperative attitude of


Adiekwe (2009:2). Management of Health Insurance Scheme in the Public Sector”. Project Work.

Care Net Nigeria (2011). Health Insurance Report and Health Insurance Affair. (Assessed on 21/01/11)

Mfon, A. (2005:1). “State of Nigeria’s Health Sector; The need for National Health Insurance Scheme”. A Workshop Paper Presented in Enugu.

Omoruan, Bamidelle & Philips (2009:2).”Social Health Insurance and Sustainable Health Care Reform in Nigeria”. Ogbomoso, Nigeria.

Ugbaja, C.O. (2007:19). “Improving Health Care Services in Nigeria”. Community Health Care. July – August.

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