In this piece, Daily Trust examines how low health insurance penetration has sent many Nigerians to early graves, especially those battling critical illnesses, on account of their inability to afford quality healthcare when necessary.
His gaze moved round the sympathisers cramped in their living room before settling on the dusty portrait of his late father.
Stuck in the grief of his eventual death after five years of an uphill battle with cancer and stroke, 29-year-old Daniel Ajayi, flanked by his younger siblings in their Akoko home in Ondo State, concluded that life would never be the same for the family. “I can’t believe we lost him,” he groaned, and added, after a long pause, “despite all the efforts we made!”
In a later chat with our correspondent on what led to his death, given that the two ailments could have been managed to elongate his life, Daniel identified lack of funds, as he noted that cancer was a familial disorder in his (father’s) lineage.
Exhaling audibly and intermittently, he relived, with remarkable sadness, his late father’s once comfortable lifestyle before the ailments struck. “We were a comfortable family, especially when my father was in active employment. We lost my mother several years ago, but since he retired, things took a gradual turn for the worse.”
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Asked why his father never insured his health against critical illness, knowing he was predisposed to it by virtue of heredity, a distressed Daniel said they first heard about such an insurance product in the course of treatment. “We all have general knowledge of health insurance, but it was in one of the hospitals we visited we were told about critical health insurance. They said it could have helped us to meet certain financial needs, but it was already late.
“We sold a lot of things to raise money for his treatment, but they were not enough. We lost him eventually; the same way two of his older siblings died.”
Nigeria’s crawling health insurance market
Like Daniel’s late father, many Nigerians have, prematurely, been sent to their graves by critical illnesses like cancer, stroke and heart attack (now termed ‘silent epidemic’ by the World Health Organisation), due partly to their inability to afford quality healthcare, whereas they could have insured themselves against such eventuality.
While many Nigerians have died as a result of malaria, tuberculosis, diarrhea and other common ailments, insurable critical ailments like stroke, cancer, heart attack and organ failure have equally led to the death of many, including those who would have found the premium quite cheap.
A report by Olusegun-Joseph (et al) published by the National Library of Medicine in 2021 showed that cerebrovascular disease like stroke and vertebral stenosis, heart failure, hyperglycemic diseases like diabetes, and chronic kidney and liver diseases are some of the common causes of death in Nigeria.
The report identified the three common causes of death as stroke at 25 per cent, HIV at 10 per cent, and heart failure at 9.7 per cent.
In 2019, the World Health Organisation, in commemoration of the World Stroke Day, said stroke afflicts about 200,000 people annually in Nigeria, out of which it said a whopping 88,000 persons die in the first three months.
Also, the WHO described cancer as the second leading cause of death globally, with about 70 per cent emanating from low and middle-income countries. The global health body noted, in fact, that the number of cases was expected to rise by about 70 per cent over the next two decades.
Already, it noted that every year, Africa records around 1.1 million new cases of cancer, resulting in about 700,000 deaths, and in Nigeria, it said 115,950 new cases were detected in 2018, with about 70,327 deaths recorded, resulting chiefly from breast cancer in women and prostate cancer in men.
Indeed, a medical doctor and founder, Tillit MSME Microservices, Dr Yomi Sule, described critical illness as a medical condition that has low frequency, low incidence or low prevalence but has a high impact in terms of morbidity and mortality.
Speaking in November at a webinar organised by Coronation Insurance, he stated, “It also has high financial impact on individuals or households. Examples are cancer, cardiovascular accidents like heart attack, cerebrovascular disease like stroke and major organ failure, which could require a transplant, like kidney. Likewise, we have conditions that lead to coma and paralysis.”
Meanwhile, findings indicate that the disturbingly low rate at which Nigerians embrace insurance has contributed to deaths from critical illnesses, unlike the rate in countries with higher insurance penetration.
A former President of the Nigerian Medical Association, Prof Mike Ogirima, noted that to a certain extent, insurance would have helped to reduce deaths from illnesses, especially the non-communicable diseases like cancer and stroke. He said lack of funds in such instances could mean lack of life.
Ogirima, who is the Chief Consultant Orthopaedic and Trauma Surgeon at the Ahmadu Bello University, Zaria, stated, “Given that many people have not bought into insurance here, there is paucity of funds and there is an extent to which the general insurance scheme can take care of non-communicable diseases like stroke, high blood pressure and cancer.
“All over the world, their treatment is highly subsidised by the government, and in the absence of that in Nigeria, people have to depend on out-of-pocket expenditure, which tells heavily on their families. So, health insurance would have been the option to take care of it, but we are not contributing enough. That leaves a lot of funding gaps.”
Speaking on how the inability to pay for treatment could lead to the death of patients, Ogirima stated, “In rural and urban areas, there is poverty. Of course, there is a policy that if there is an emergency, no doctor should ask for funds in the first 24 hours. But after 24 hours, if the person’s life has been sustained, they have to look for funds for their treatment. So, if there are no funds, they can’t receive quality healthcare. There may be drugs such an individual needs to buy to sustain their health, but if there is no funds after 24 hours, that may have an effect.
“There are instances where patients would come and they don’t even have the money for blood transfusion. In such cases, doctors could donate blood or levy themselves. So, to a large extent, lack of funds can mean lack of life, because of inability to fund the needed healthcare demand.”
Also speaking on how critical illness insurance has helped to save lives in other countries, Sule said the initiative has helped to reduce the mortality resulting from cancer in Ghana.
He stated, “In Ghana, they have almost 70 to 80 per cent of health insurance coverage, and that happened because they have about 25 per cent, which is paid as part of VAT, so when you are buying any product, it goes into the risk pool. I think Ghana has cover for cancers.”
Indeed, in 2022, the National Health Insurance Authority in Ghana said in a December 2023 report, titled ‘NHIS saving lives of Children with childhood cancers’ that between June 2022 and February 2023, not less than 226 children suffering from the four common childhood cancers (Acute Lymphoblastic Leukaemia, Burkitt Lymphoma, Retinoblastoma, and Wilms Tumor) had so far benefitted from the National Health Insurance Scheme Benefit Package, for which it paid Ghs143,142.47 to the accredited tertiary health institutions for the treatment.
Conversely, many children diagnosed with cancer in Nigeria die due to lack of quality healthcare, worsened by the lack of such critical illness insurance. The Founder, Medicaid Cancer Foundation and consultant paeditrician, Dr Zainab Shinkafi-Bagudu, said in an interview in 2022 that 80 per cent of the 40,000 Nigerian children diagnosed with cancer yearly die as a result of poor detection and poor clinical treatment.
For stroke, the Nigerian Stroke Organisation said in 2019 that 100,000 stroke cases occur in the country annually, adding that one in four persons has the risk of having a stroke.
The President of the Organisation and Professor of Internal Medicine/Neurology, Abayomi Ogun, stated, “The African continent has some of the highest rates of stroke worldwide. In Nigeria, stroke is the most common medical emergency in most hospitals and accounts for up to eight out of 10 neurological hospital admissions with at least 100,000 cases occurring every year.
“Therefore, interventions targeting these dominant risk factors have the potential to fast track progress on stroke prevention in Nigeria and indeed the African sub-region.”
Also speaking on the gains of health insurance, the Assistant Director, Underwriting and Marketing (Life Operations) at the African Reinsurance Corporation, Abdul-Rasheed Akolade, described health insurance as a policy that makes provision for the payment of medical expenses and by extension the cost of surgical operations for certain illnesses for an insured person.
He said at the webinar that if the insured risk comes about, the insured person could settle the bill and be reimbursed later or the insurer makes the payment to the healthcare provider. He stressed that instead of people going public to seek funds, insurance would cater to their needs.
Nigeria’s Insurance Industry
For years, insurance penetration in Nigeria has remained low, at about 0.5 per cent.
A report by Leadway Assurance, a popular insurance company in Nigeria, showed that the country’s insurance penetration as of 2022 stood at 0.5 per cent, “regarded as one of the lowest and worst in Africa”.
This implies that only 0.5 per cent of Nigeria’s 214 million people, translating to about 1,070,000 people, have insurance.
Similarly, a report by Statista in 2022 revealed that while the global average was 6.7 per cent, Nigeria’s penetration only rose from 0.3 per cent in 2020 to 0.4 per cent in 2021, whereas South Africa had 13.7 per cent as of 2020, the highest in Africa, while Egypt had 0.6 per cent.
This is in spite of Nigeria being the largest economy and most populous country on the African continent.
More importantly, the report by Leadway indicated that only about three per cent of Nigerians had health insurance, which, according to experts, contribute significantly to the avoidable deaths in the country.
To further show the poor awareness about insurance in the country, the report indicated that even for motor vehicle insurance that is compulsory, only 3.4 million out of the 12 million cars on Nigerian roads had insurance as of the time. A PwC report had indicated that about 10 per cent of the compulsory motor vehicle insurance were fake.
The Leadway report however blamed the low insurance penetration in the country on low standard of living, inadequate access to information technology, weak regulatory framework, lack of skilled personnel, and poor knowledge of insurance service by the prospective assured.
Meanwhile, findings revealed that countries with high per capita income have higher insurance penetration. For example, the World Bank reported that South Africa’s per capita income was $15,920.4; Egypt had $15,096 while Nigeria had $5,862.2.
On the other hand, the report indicated that the challenges facing the insurance industry in Nigeria are inappropriate pricing and risk profiling, poor product-market fit, inadequate distribution channels, and low public confidence.
Implications of poor health insurance
One of the major consequences of the low health insurance in Nigeria, especially that of critical illnesses, is the high number of avoidable deaths, including those from the critical illnesses.
In February 2023, the Federal Ministry of Health and Social Welfare said no fewer than 2,445 women and children die every day, noting that 70 per cent of the deaths were preventable.
In 2019, the National Coordinator for Non Communicable Diseases at the Federal Ministry of Health, Dr. Nnenna Ezeigwe, said of cardiovascular diseases, “CVDs are a significant public health concern responsible for 11 per cent of over two million NCD deaths in Nigeria annually. It is also responsible for a high burden of morbidity and disability. Most people with CVDs are not aware until catastrophes like stroke, heart attack or death occur.”
Speaking on how funding could have prevented some of the deaths, which underscores the place of insurance for such critical diseases, she stated, “The economic burden of NCDs on families and Nigeria in general is significant because the cost of treatment is high, usually paid out of pocket and death is mostly premature, cutting victims at their prime of productivity.”
A research by Andrew Wilper (et al) in 2009, titled ‘Health Insurance and Mortality in US adults’ and published in the National Library of Medicine showed, “The uninsured are more likely to die than are the privately insured”, concluding that, “Lack of health insurance is associated with as many as 44,789 deaths per year in the United States, more than those caused by kidney disease. Despite widespread acknowledgment that enacting universal coverage would be life saving, doing so remains politically thorny.”
Beyond the deaths, however, it has become a recurring phenomenon in Nigeria for poor patients to be detained in hospitals over their inability to settle their medical bills, in which case such patients suffer humiliation.
In some cases, some remain until the public is alerted to their plight; some abscond from the hospital, while some others find other means to raise the funds.
Gains of embracing insurance
Speaking at the webinar, the Executive Director, Technical Operations, Coronation Life Insurance Limited, Adebowale Adesona, said in an era marked by unforeseen challenges and uncertainties, people should ensure that safeguarding their health takes the centre stage.
He added, “The impact of critical illness is not only physically and emotionally challenging, but also financially devastating. Critical illness insurance should be a fundamental part of people’s financial and health planning as it is crucial to people’s well-being and that of their family.”
Also, another insurance expert, Kehinde Grillo, noted that critical illness insurance is mostly affordable, because individuals are able to determine their insured sum.
He noted, “People have options, based on their financial strength. To make it easier, it’s possible to split the payment, maybe bimonthly or quarterly, given that generally, insurance is an annual renewal agreement between insurers and the insured.
“For a cover of N10m, you can pay as low as N10,000 premium annually. So, it’s very cheap,” he added.
He explained that people could buy the product themselves, adding that the fears people have about claim settlement could be easily resolved by the regulator, the National Insurance Commission, even as he called for increased awareness and education of insured persons.
He added, “For example, it would be better to clarify if a critical health insurance covers pre-existing conditions. Insurers should take the time to educate the insured persons on what the policy covers. It will limit back and forth.”
Speaking further, Akolade stated, “We need to make insurance our priority. The first critical illness policy originally provided cover for cancer, stroke, heart attack and coronary bypass surgery, but now the list is endless. He noted further that the scope of the cover could be flexible, as it could be payment of income whenever the insured person becomes disabled up to an agreed age.
“Some of the critical illnesses do not have known causes, but if there is an insurance cover, you are sure that the financial protection is there, and it gives you peace of mind and you can start early treatment. There will also be no need to depend on your employer or children because you have a cover.”
He stated further that an insured person could also procure products from different insurers, though with full disclosure. He noted that if the need for a claim arises, all the insurers would pay.
Also, Sule said deepening insurance awareness is everybody’s responsibility, adding that if relevant institutions, opinion leaders and even music artistes keyed into the sensitization drive, it would strengthen the system and broaden the coverage.
He stated, “At the moment, no social health insurance scheme at the state or national level or private HMO has coverage for critical illnesses, so it is usually procured as a rider or stand-alone product from life insurance companies.
“We need to unbundle insurance in general so that people don’t know that they are paying for it and it works. The National Health Service (UK) that we talk a lot about is sustained by taxation, meaning that while it seems nobody is paying for it and it seems free, it’s not free. People are being taxed for it. Likewise, we can find a way to embed it as part of everyday payment, like VAT, or as part of withholding contributions for employees.”
He lamented that for a long time, health insurance penetration stands at three per cent, but that since the latest National Health Act became operational, there had been an increase in the number of persons insured, “especially with the operationalization of what is called the Basic Healthcare Provision”.
He advised Nigerians, whether middle income or indigent, to explore the social health insurance scheme in their state.
The Minister of State for Health, Dr Tunji Alausa, in an interview recently said the government was working towards universal health coverage for Nigerians to have access to “decent and meaningful healthcare”.
He added, “With our sector-wide approach, where we will now mobilise funds from development partners with our basic healthcare provision fund, we would have more funds available to provide more coverage via the NHIA to millions of Nigerians.
“As we continue to do that, we are going to work on mobilising more budgetary allocation to that. The President (Bola Tinubu) is determined that Nigeria meets the universal health coverage goal by 2030.”
A financial advisor, Adekanla Desalu, also stressed the need to propagate insurance and help everybody understand its benefits.
“It is so painful to hear when people go through a lot of these things. We need social education. A lot of people, including those that are educated, have shied away from insurance, either for life or motor or theft, etc. They feel it’s a waste of money. Until we start to help them understand its benefits, they will not be able to appreciate the advantages.”
He called on relevant stakeholders to meet the people halfway and show them evidence that insurance works. He lamented that most people live for now.
He added, “If I look at the entertainment industry, when things like that happen, it becomes a rude shock seeing when they begin to scamper to see how they can gather funds. So, there is no plan for the future or any eventuality.
“We need to democratise health insurance, I mean how can we make it available in small packages for entrepreneurs or people in entertainment; that they can just buy off the shelf. Good enough we have a lot of digital innovations in this country, but how easy is it to buy critical health insurance on my phone and I know that I can plan and pay a little and sustain the payment towards having a lump sum insured that I can look up to in the future.
“We need to look at how we can make things available in small packages for entrepreneurs and others. People must plan for when they are old, and in this part of the world, old people are not often treated fairly. When they come to HMOs, there are so many denials.”
While stressing the need for insurance, Akolade noted, “The wise people would make provision for water without being thirsty. It’s not when you are now thirsty that you are looking around for water.”
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