‘Nigeria should not repeat Ghana’s m

Ghana’s health insurance got accolades across the world, and was considered a standard in its early years, giving some hope that with adoption, o several delegates from Nigeria were sent to understudy, is now struggling to live up to its once lofty reputa

What has been your experience so far as a private company operating in the health insurance space in Ghana? I will say that the private health insurance industry is still relatively young and very small. There are about twelve or thirteen private health insurance companies in Ghana. Initially, most of us operated as a private mutual insurance company, so there was no commercial aspect to it. However, we were actually soliciting for clients and all that so in 2014 or 2015, the National Health Insurance Authority (NHIA), which is the regulatory body, brought in new guidelines and so most of the companies converted to private commercials.

Prior to that, there were about thirty (health insurance companies), but with the directive to go commercial, a few fell off, so we ended up with just about twelve. If you put all our membership together, we are still under 300,000 possibly even 250, 000 or there about in terms of lives we are covering.

We play mostly in the formal sector so we have corporate institutions buying health insurance for their employees, and dependants of their employees. If you take the formal sector in Ghana, it is about a million. So, if private health insurance is covering just about 250,000, that is a very small percentage; considering the figure of coverage also includes dependants. If there are 250,000 lives under private health insurance, about a third of them will be principals, which are the employee. This implies we are covering fewer than 10 percent of the formal sector, so there is room to grow.

We have not come into the informal sector yet, which is much larger than the formal sector. To go into the informal sector, we need technology; to register people, to collect the money etc. In the corporate sector, when there is issue with a bank, you can always go back to them, because you know where to find them. But when it comes to individuals, we can’t easily trace. Because we don’t have a proper address system, it becomes a bit difficult, so we need some kind of technology that will protect both the insurer and the insured. We realized not many of us are going into the informal sector. Nationwide is now trying to go into the informal sector. We had to fine tune our products, go back and forth. Finally, we are ready to go into the informal sector.

The NHIA has about 48 percent coverage currently, but it is not as efficient as it should be. We have providers who haven’t been paid for a long time and all that but they are trying, I mean, some of the debts have been paid.

It gives us both opportunity and a threat. Opportunity because people are used to it and it is not working well, sensitization is good but it’s not working as it should, so there’s an opportunity for a private person to step into it and make it work well. On the flip side, because it’s not working well, people don’t even want to touch it. It depends on how as a company, one will be able to turns things around.

It is obvious there is an opportunity to come in, offer something better and make it worth their while, so, what have you been exploring and looking to do in that line?

One major thing we are exploring is using mobile money to pay the premiums. Secondly, we are looking at micro health insurance where people can break their pay- ments into monthly, weekly or daily, instead of paying for a whole year upfront.

There is also a question people keep asking, which is a bit ridiculous, since in this part of the world, insurance is not a way of life. They ask, if I pay and do not fall sick, what happens to my money? Or they say, I don’t usually fall sick, so I’d be paying and won’t get anything. The insurance culture (in this part of the world) is not the best, so, it takes a lot convincing to get them. And of course, health insurance was introduced almost as a free product because we use the social health insurance in Ghana. People pay the equivalent of $2, up to about $10 as premium for the whole year. So, it is mostly subsidized by the state where we are using taxes.

The funding comes from the National Health Insurance Levy; included as 2.5 percent VAT on most of the items we buy, and then 2.5 percent of the Social Security and National Insurance Trust (SSNIT) as well. If you are a worker, you pay 5.5 percent and the employer pays 13 percent, which gives 18.5 percent and out of that, 2.5 percent is deducted to fund NHIS.

Tax is how the health insurance is really funded, not the premiums because it is nothing to write home about. So, again, if you have someone who has to pay two to ten dollars a year and then you actuarially determine premiums which are like minimum of $15 a month, then you really have to do some convincing for them to buy into it. That is where the major problem is.

On the flipside, exposure helps, because people who have lived abroad and come back often understand the dynamics. If you take the companies that willingly buy health insurance, most of them are the blue chip companies or multinationals. However, we are gradually also getting some local companies coming on board, but the average SME is still sceptical.

Apart from that, the way the NHIS is structured because they take 2.5 percent of your SSNIT, if you are working in the formal sector and want to join NHIS, you don’t pay any premiums. If they are already taking 2.5 percent of your SSNIT, why then would a company still take a private policy? Therefore, it is not attractive.

Also, the law as we have it now, says everybody resident in Ghana shall belong to the NHIS. So, the private is nice to have, but it is not a must, rather, the NHIS which is mandatory by law.

Health insurance companies in Nigeria complain of NHIS being both regulator and provider, is that same in Ghana?

We have the same situation here, because the NHIA is mandated by law to run the NHIS, and at the same time, regulate the private health insurance industry. So, you’ve got a player-referee situation here, but that’s the way the law is.

Do you foresee a scenario where it could be made mandatory to pick either government or private?

It was like that before it was reviewed, but as for whether we will go back to that, I can’t tell. The ideal situation could be likened to how pension administration is done. At first, there was only SSNIT taking care of pension, but now we put up the National Pensions Regulatory Authority (NPRA). They have been giving the private sector the chance to operate pension so we now have it in two tiers.

The first tier is compulsory government, and all the pension trustees around handle the second tier. Therefore, if we could apply that to health insurance, we could have a government insurance that covers primary healthcare and emergency services, and a second layer which then becomes private (also mandatory), to supplement what the government would do. Because, as it stands now, since I work and pay SSNIT, whether I can afford to pay or not, I would still register free on NHIS and the government is overburdened with the thing.

So, if we take the pension approach where we could have the base being government, and then put the private on top of that as the second tier, then it can cover critical areas, this is the way I think will be best.

Increasingly, government is finding it difficult to pay the bills. It is overburdened, so they need to find a way out.