NHIA boosts health insurance capitation by 60%, introduces 40% fee-for-service hike in Nigeria

The National Health Insurance Authority (NHIA) has increased both capitation payments (fixed payments per patient) by 60 percent and fee-for-service payments by 40 percent to address concerns from healthcare providers about low reimbursement rates.

The authority’s new agreement on medicine and services pricing moves tariffs from N750 in the past 12 years to N1,200, a rate key stakeholders have agreed will be adopted for only three months.

A standard pricing that reflects current economic realities is expected upon the completion of an ongoing actuarial studies by the authority in September, the NHIA said in an official statement released on Wednesday.

The development was reached after the NHIA’s meeting with stakeholders including the Association of Private Medical Practitioners, Health Maintenance Organizations (HMOs), Guild of Medical Directors (GMD) and other key players in the health insurance ecosystem.

“We are asking for N10,000. What we have agreed is still far from cost realities. They said some experts are trying to the ideal and they have begged for understanding,” Kay Adesola, ANPMP told BusinessDay.

The president explained that a strong case was made for a 200 percent increase in capitation but the NHIA insisted it could not afford it based on its current revenue allocation.

The report on the actuarial study will determine the actual and realistic tariff to be implemented between now and the next three years when another review is due.

The ANPMP in May had threatened to pull out of the national health insurance indefinitely, if the NHIA fails to adjust the tariff, cutting off some of the 16 million enrollees covered by the scheme.

Despite a decade of inflation squeezing hospital budgets, the NHIA tariffs remained static while it struggled to increase enrollment of a significant size of the population.

With less than eight percent of Nigeria’s over 220 million population covered after 19 years, many cannot access healthcare without coughing out unplanned expenses out-of-pocket.

Current costs far outpace stagnant tariffs for drugs as energy bills, for instance, grab more than 40 percent of hospitals’ overhead costs in Nigeria, according to ANPMP.