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Fuel subsidy removal: Need for health insurance as a statutory palliative

The recent removal of fuel subsidy by President Bola Tinubu’s administration has continued to generate discussions for and against the policy....

The recent removal of fuel subsidy by President Bola Tinubu’s administration has continued to generate discussions for and against the policy. While some support it due to the inherent benefits to the nation’s economy in the long run, others are clearly against the decision. This is due to the hardships they say the policy will impose on Nigerians. 

The removal of the subsidy, according to some experts, would free up resources for the development of other key sectors such as education, healthcare, transportation and critical infrastructure. The government also added that the decision would curtail perennial corruption in the system and provide it with surplus revenue to spend on other projects. 

Either way one may decide to join, the fact is that the subsidy is in itself a form of palliative. Now that it has been removed, there is genuine concern that many Nigerians will be unable to meet the costs of healthcare, education, transportation, food and welfare. Unfortunately, the government has yet to propose tangible palliatives to mitigate the impact of its decision on low-income people. 

Aside from the inflationary effect of floating the naira, prices of essential commodities have skyrocketed beyond many Nigerians’ reach. And if the trend is left unchecked, the policy will exacerbate poverty and further push Nigerians into extreme poverty. 

The health sector, which represents a critical aspect of everyday life, has been hit the hardest. Despite poor health indices, many essential medicines are now scarce on the market and many hospitals are out of stock. 

Healthcare costs have made it increasingly difficult for many people to afford necessary treatments and medications. In response to this challenge, health insurance is now more pronounced as a subsidy palliative.   

Incidentally, the challenge comes at a time the National Health Insurance Authority (NHIA) is armed with the NHIA Act, 2022. The law has transformed the former National Health Insurance Scheme (NHIS) into a robust authority with wider functions and regulatory powers.   

The newly passed law, signed by former President Muhammadu Buhari on May 19, 2022, makes health insurance compulsory for all Nigerians and legal residents. It also provided for the establishment of a vulnerable fund to subsidise the cost of healthcare for 83 million poor Nigerians as well as accelerate the implementation of the Basic Health Care provision fund tailored towards the acceleration of Universal Health Coverage (UHC).

In addition, the authority widened its target by launching an innovative programme called the Group, Individual and Family Social Health Insurance Programme (GIFSHIP), as a deliberate attempt to enrol more Nigerians, not covered by other health insurance programmes, into the health insurance ecosystem. 

It will therefore be instructive for the Tinubu administration to speed up the implementation of these programmes to cover more poor Nigerians who cannot afford their own out-of-pocket health expenses. 

These and other programmes of the authority, if carefully harnessed and supported, will provide individuals and families with financial security. This is done by covering a significant portion of their healthcare expenses and will reduce the burden of out-of-pocket payments, particularly for those on lower incomes. 

It will also increase access to healthcare by offering affordable health insurance options; more individuals can access essential medical services without facing financial barriers. It will also provide a wide range of healthcare services a beneficiary will receive without incurring exorbitant costs. 

Therefore, the adoption of health insurance as a subsidy palliative is crucial for addressing rising healthcare costs and ensuring financial access to quality healthcare for all individuals. Health insurance, as a statutory palliative, will surely ease the health burden of subsidy removal. 


Muhammad S. Shehu wrote from the NHIA State Office, Bauchi 


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