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Nigeria’s National Health Insurance Scheme

In 1999 the Federal Government of Nigeria approved the initialisation of the National Health Insurance Scheme (NHIS) for workers in the public service. The scheme was launched on October 15, 1999, it was given a legal backing by Decree 35 of 1999 (now Act 35 of 1999) and signed into law by the former President, Chief Olusegun Obasanjo.

Soon after it was launched the success of the scheme meant it was expanded to welcome participation of workers from private sectors. To help get the scheme into businesses various HMOs were signed up as financial managers.

Definition of an HMO - an organisation that provides or arranges managed care or health insurance, self-funded health care benefit plans, individuals and other enti­ties…and acts as a liaison with health care providers (hospitals, doctors,) on a prepaid basis.

Why choose HMO over indemnity insurance?
The main difference between traditional indemnity insurance and an HMO is that an HMO covers care rendered by those doc­tors and other professionals who have agreed by contract to treat patients in accordance with the HMO’s guidelines in exchange for a steady stream of customers. HMOs cover emergency care, regardless of the health care provider’s contracted status.

How does the NHIS work?
First, an HMO goes into agreement with hospitals and other care providers – creating a partnership. An HMO can have partnerships with many hospitals and care providers. Staff of participat­ing organisations and their family members choose the preferred ones, either because of their proximity to their homes or because of their reputation.

Then, the participating businesses and companies commit to pay an agreed amount of money to the HMOs – the amount will depend on the number of workers to be covered. The HMO issues the family members with identification cards which they present at the hospital counter during visits. After a hospital or doctor visit the patient does not have to pay any fees or bills.