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Policy Brief: Simple Policy Gaps and Policy Solutions to Ghana’s National Health Insurance Scheme

In the period 1970 – 1983, Ghana experienced almost negative growth in every important economic index: Real GDP (-0.8), Gross Domestic Investment (-5.9), Export (-4.4), Import (-7.2), Total Agriculture (0.5), Terms of Trade (1.3). In fact, the available data only buttressed the fact that these were hard times coupled with hunger and the only positive growth was population growth which had an increment of 2.4 percent. The solution to such economic crisis was seen in an IMF rescue mission, which invariably gave a one size fits all solution irrespective of the socio-cultural dynamics in a country’s economy.

Ghana adopted the Structural Adjustment Program (SAP) from the IMF as its panacea to heal the country’s economic woes. Maybe the SAP focused too much on economic progress to the neglect of the social and human development indicators. There was significant improvement in the initial years with the implementation of the SAP; however there was a huge social cost especially on health sector since it’s the focus of this paper.

Before the adoption of the SAP, the health sector was prevalently supported by the national budget. The economic crisis in the early 1980s brought about a decline in budgetary allocation for the Health Sector (4.38% in 1983).

The reasons for such decline in the health sector can be associated with drug shortage, collapsing of health infrastructure and brain drains on the part of doctors because of in adequate remuneration and incentives for work. As part of the health sector reforms given by the IMF, in 1985 government introduced hospital fess as a way to recover part of the cost of treatment.

The introduction of hospital fees brought utilization barrier, a disincentive for using health care facilities. In fact, the Ghana Living Standard Survey (1987/88) recorded that about 48 percent of all Ghanaians who fell sick did not consult in any form or kind of health care service. On the average, a Ghanaian will prefer to stay at home and die than to pay hospital fees in this bid of accessing healthcare.

In rural Ghana, you are at liberty to paint or imagine the worse decline in the usage of health service everywhere. Clearly there is a policy intervention crisis and needed solution as to how quality healthcare service can be delivered at affordable cost to the populace.

Ghana was one of the first countries to put a ‘human face’ to the SAP. The government of Ghana presented the Programme of Action to Mitigate the Social Cost of Adjustment (PAMSCAD) which was to be funded by some donor partners. PAMSCAD was unable to see the light of the day and one of the major reasons for that most donors could not fulfill their pledge. It was not surprising that despite the launch of Vision 2020 in 1996, Ghana had reached Highly Indebted Poor Country (HIPC) Status in 2000. The only resource a poor man can boost of is good health. Once you are healthy, you have the ability to work to at least earn one meal for yourself in a day. The health needs of the Ghanaian citizenry are significant towards the eradication of poverty and its extreme form from the country.

1.1 Government Policy Vision for Health in Ghana


The GPRSP was a comprehensive blue print of strategies, policies programs and projects for growth and poverty reduction between the periods of 2002 to 2004. This was an agenda for growth and prosperity as mentioned by the government at the time. The GPRS based its policy improvement on the health sector on three bedrocks.

First, was bridging equity gaps in access to quality health and nutrition services. Here, the intention was to achieve by the end of the 2004, a Good and Quality or Model health centre for each district. Also, the GPRSP purported to ensure sustainable financing arrangement that protect the poor. This is the origin and birth place of the National Health Insurance Scheme. Under this thematic area, there were two plans I would like us to take note.

  • Government will phase out the ‘Cash and Carry’ system and replace it with a more humane and effective system of financing healthcare.
  • To further protect the poor in deprived areas, a low acceptable rate of payment will be fixed for out-patients and in-patients at the sub-district and district level in the Central and the three Northern regions.

Finally, the last bedrock of the GPRSP was to enhance efficiency in service delivery. Again, there are two points I would like us to note in the strategy paper.

  • Strategies that ensure availability of health workers will be developed, especially in deprived regions, including provision of financial incentives, accommodation, opportunities for career development and expanding enrolment in training institutions in deprived regions.
  • Staff and resources will be provided to expand community-based health service delivery and collaboration with informal providers being strengthened, particularly in the three Northern and the Central regions.

The GSGDA was a medium term development policy framework for the period of 2010 – 2013. The first paragraph of the executive summary referred to GSGDA as the “Government’s Better Ghana Agenda”.

The GSGDA also had a vision to improve access to quality health care as it stated clearly in the policy objective for health. The objective was to bridge equity gaps in access  to health care and nutrition services; improve governance and strengthen efficiency in health service delivery, including medical emergencies; improve access to quality maternal and child health services; intensify prevention and control of non-communicable and communicable diseases (malaria,  HIV  and  AIDS/STI/TB); promote healthy lifestyles as well as strengthen Mental Health service delivery; and make health services youth-friendly at all levels.

The GSGDA recognized the challenges in the health sector as its first theme and in all it had about ten themes. The themes include, bridging equity gaps in access to healthcare and nutrition services; Health care legislation.

It is worthy to note that government stated categorically the amendment of the National Health Insurance Scheme (NHIS) Act to allow for the implementation of one-off premium payment; Human Resources Development for the health sector, here government recognized the disparity in health personnel and resolve to deploying qualified specialists to Regional and District hospitals; continuing accreditation of training institutions; continuing development of performance management systems, including performance contracting and appraisal; and motivating and retaining medical professionals; Sustainable financing arrangement that protect the poor; Health Infrastructure; Improving governance and strengthening efficiency in health service delivery; Improving access to quality maternal, child and adolescent health services; Intensifying prevention and control of non-communicable and communicable disease and Strengthening medical health service delivery.

Let’s take note of the good intentions of every policy paper of various governments in Ghana. The policy in terms of preparations leaves nothing behind; it is comprehensive and covers wide range of vision. You also realized that some regions are given special attention with respect to healthcare. Available data shows that the Central Region is the poorest region in southern Ghana and the three Northern regions are the poorest in the whole of Ghana. Have these regions seen some progress? Are they still the poorest regions in Ghana? We can only give the right answers to the questions if and only if we judge policies by results and not the intensions. The right solutions are in the policies intentions but it seems the reality depicts a different implementation plan far from the original policy plans and intentions.

1.2 Improvement on Health

It will be very unfair to say that the health sector has seen no progress. There has been a significant level of improvement, closing health infrastructural gap, health accessibility gap, reduction in maternal and deaths. At least the progress report of the GPRSP attest to the fact that our children moved away from dying from Measles, Polio virus could no longer affect our children and about 88.4% 0f pregnant women had access to antenatal care in 2006.

Doctor to population ratio had improved from 1:17,773 in 2004 to 1:10,641 in 2006. However, in the face of the progress, a significant proportion of the population suffered from Guinea worm reported cases, giving a cumulative total of 4136 in 2006. Round 6 of the Ghana Living Standard Survey (GLSS6) brought further progress; the percentage of the sick who did not consult doctors decreased from 40.6 percent in 2006 to 33.8 percent in 2013.

Since our focus is on the National Health Insurance Scheme (NHIS), it is important to note that, Act 650 of 2003 had established the insurance scheme. In 2006, about 38 percent of Ghana’s population had registered for the NHIS. The GLSS6 reported that hospital expenditure was mainly borne on household and NHIS representing 54.5 percent and 41.5 percent respectively.

Accessibility and affordability of health care especially to the urban and rural poor is critical to the utilization of health care. The NHIS whether good or bad has become one of the important sources of funding for individuals to access healthcare in Ghana. It is imperative that the NHIS scheme needs to survivor the test of time and counting to benefit its subscribers fully.

1.3 National Health Insurance Scheme (NHIS)

The National Health Insurance Scheme was originally established in 2003 by Act 650. The objective was to remove financial barriers which limit access to health care and nutritional service, particularly to the poor and vulnerable group. In 2012, through Act 852, the National Health Insurance Authority was established to compliment the National Health Insurance Scheme. This saw the establishment of the National Health Insurance Fund and Private Health Insurance Scheme to provide universal health coverage for both citizens and non-citizens in the country. The governing body of the Authority is a board consisting of a (A) chairperson and (B) one representative with a rank not less than a director from the following;

  • The Ministry of Health
  • The Ministry of Finance
  • The Ministry responsible for Social Welfare
  • The Ghana Health Service

The board also includes representative of the following with their respective rank of service

  • The National Insurance Commission not below the rank of a Deputy Commissioner;
  • The Social Security and National Insurance Trust not below the rank of General Manager;
  • The medical and dental profession;
  • The pharmacy profession;
  • The accountancy or finance profession;

(c) A legal practitioner who has experience in health insurance;

(d) Two health professionals with expertise in health insurance;

(e) One representative of organized labor;

(f) The Chief Executive or a person acting in that office; and

(g) Two persons, representing members of the National Health Insurance Scheme, one of whom is a woman.

The board members are appointed by the president of Ghana in according with Article 70. A member of the board holds office for a period not exceeding four years and can be re-appointed for one term only.

The Authority is responsible for a number of functions; the following highlight few the functions.

(a) Implement, operate and manage the National Health Insurance Scheme;

(b) Determine in consultation with the Minister contributions that should be made by members of the National Health Insurance Scheme;

(c) Register members of the National Health Insurance Scheme;

(d) Register and supervise private health insurance schemes;

(e) Issue identity cards to member so f the National Health Insurance Scheme;

(f) Ensure:       (i) equity in health care coverage

(ii) Access by the poor to healthcare services

(iii) Protection of the' poor .and vulnerable against financial risk;

(g) Grant credentials to healthcare providers and facilities that provide healthcare services to members of the National Health Insurance Scheme;

(h) Manage the National Health Insurance Fund;

Through the effective administering of the National Health Insurance Authority’s function will the realization of the objective to provide access to healthcare services to the persons covered by the Scheme be actualized?



2.1 NHIS Subscription Fees

The NHIS subscribers are in two categories, that is, informal and exempted groups. Members of the exempted groups do not pay NHIS premium. The exempted group includes SSNIT contributors (formal and self-employed), children (under 18 years), pregnant women, person with mental disorder, pensioners of SSNIT, aged (above 70 year), other categories prescribed by the minister. However, the law mandates the payment of 2.5% of their social security to be contributed to the National Health Insurance Fund. The informal groups are allowed to pay for the NHIS premium.

The problem arises due to the flat fee paid by the middle income, rich, very rich, very poor and poor. The core poor are not allowed to make any payment for the registration of NHIS. Through the registration process, every District/Sub-metro Scheme has an address and identification system which enables all residents to be identified and reached through a community, street, house, household and household status coding pattern.

This gives a unique code to identify individual’s income bracket for associated premium payment. For example, if the registration process and code identify you as part of very poor and poor income group, all identified persons will pay a flat fee of Ghs7.20 equivalent to ($1.3). If your code tags you as middle income, rich or very rich, you will pay a flat fee of Ghs18.00 (3.5) or Ghs48.00 ($9) respectively. This limits economic and financial freedom of individuals as healthcare needs of others are borne by all in the society

2.2 Transparency of the Scheme

Transparency of policy to individuals, health providers and government

The procedure for claim collection by stakeholders and health providers lack transparency and ultimately abuse. Preliminary survey conducted revealed that health providers administer half prescription to individuals yet collects full claim from National Health Insurance Authority. One key reason given by the health providers for such practice was because claim collections are delayed, therefore the practice allows increase in stock so they can always have drug to administer to patients. The 2009 Annual NHIS report, upon establishing the Internal Audit Unit for the NHIS, had to suspend some service providers from providing service to NHIS subscribers due to fraud and abuse on their path.

2.3 Financial Challenges

It is very clear that the National Health Insurance Scheme (NHIS) faces financial challenges. Various government ministries borrow indiscriminately from the National Health Insurance Fund (NHIF). It was not surprising when the financial Minister acknowledged the payment of NHIS debt in the 2018 budget. This is how Mr. Ken Ofori Attah puts it;

“Mr. Speaker, the Ministry paid GHS 0.6bn out of the total government indebtedness to the National Health Insurance Scheme (NHIS) and this has improved funding and smoothen running of hospitals.”

The total government indebtedness to the National Health Insurance Scheme was not mentioned by the minister. His revelation alone gives a fair idea that billions are borrowed from the NHIS coffers. This contributes to the financial constrains and challenges faced by the National Health Insurance Scheme. Dr. Samuel Annor, the CEO of NHIA in July, 2018 proposed an increment of the NHIS levy from 2.5 percent to 3.5 percent as a solution to save the collapsing Insurance scheme. The unproductive lending of the insurance scheme fund is weakening the scheme. The strategy of issuing a new Health Insurance Card was last adopted as a way of raising funds for the Scheme. Will there be a call for new card registration?

The mid-year budget introduced a straight tax which seeks to separate the NHIS levy of 2.5 percent from the already existing Value Added Tax rate.

Pieces of financial report recorded in the 2013 annual report recorded as at 31st December 2013, the balance on the Authority’s investments, including accrued interest stood at GH¢159.9 million, representing a 15.9% decrease from the GH¢190.2 million recorded in 2012. This is a significant decrease in National Health Insurance Authority’s investment.

The NHIS funds should not be merged in the consolidated fund that eventually feeds government project with no interest charged to benefit the scheme. This usually cause delay in paying health providers and subsequently preventing citizenry from enjoying access to health care.

Managers of NHIS should be able to invest in profitable ventures to generate revenue towards sustaining the scheme. The National Health Insurance Scheme became an authority in 2012 and as part of its mandates the National Health Insurance Authority to implement, operate and manage the National Health Insurance Scheme. Being an Authority gives the scheme independence to operate, however true independence should be reflected in the sustainability and effective operation of the scheme.

2.4 Accountability of the National Health Insurance Scheme

Every institution in the financial sector is required to publish financial statement annually. Even private institutions do this owes the annual financial report to their customers to access the growing concern of the ventures. Through the publication of financial report and audit report (internal and external) holds institutions accountable to their customers, stakeholders and none customers.

The National Health Insurance Scheme has not publicly published any financial report. In our preliminary survey, we found the format of a financial report published from NHIS with no figures on it. Since the National Health Insurance Authority (NHIA) is yet to publish its financial statement, it becomes very difficult for stakeholders, citizens and customers to access the performance of scheme.

The National Health Insurance Authority should take steps to be very accountable to its stakeholders.  

3.0 Recommendations

In this chapter presents recommendation based on the analysis on the policy gaps. The policy brief on the National Health Insurance Scheme has indicated the influence of financial constraints, indiscriminate borrowing and unproductive investment schemes fund. The recommendation is presented to inform policy makers and Nation Health Insurance Authority to take adequate step in helping sustain the National Health Insurance Scheme.

3.1 NHIS Subscription Fee

  • NHIS should have varying and several premiums for individuals to subscribe to when deem fit and affordable.
  • Flat fee rate for NHIS subscription to several groups should be replaced by varying premium fees and respective health packages.


3.2 Transparency of the Scheme

  • The procedure for claims must be transparent for all stakeholders and avoid red tape.
  • Subscribers should be given assessment forms to aid the NHIA receive feedbacks on health providers from beneficiaries.

3.3 Financial Challenges

  • The NHIS funds should not be merged with the government’s consolidated fund to allow National Health Insurance Authority have full independence and control over their funds.
  • National Health Insurance Authority should be able to invest in profitable ventures to generate revenue towards sustaining the scheme.
  • Borrowed funds by various government ministries should be paid in full to NHIS in the shortest possible time.

3.4 Accountability of the National Health Insurance Scheme

  • The National Health Insurance Authority should be held accountable by both health providers and subscribes through the publication of financial statement.
  • Health providers acceptance of the NHIS card for health service should be based on the scheme’s ability to fulfill their payment especially government hospital.

4.0 Conclusion

The National Health Insurance Scheme is an important social intervention policy that has proven to aiding access to health care mostly by poor and vulnerable groups in Ghana. The management of the scheme’s fund is important toward ensuring accountability, transparency and sustainability. Policy solutions in this policy brief provides alternative for proper management and to promote the realization of financial freedom on the path of subscribers of the scheme.  







 Institute for Liberty and Policy Innovation




Ghana Poverty Reduction Strategy Paper, 2003-2005. Vol. 1

The 2018 Budget Statement and Economic Policy of Government

Ghana Living Standard Survey Round 6, 2014

GLSS-6, Poverty Profile in Ghana 2005 – 2013

Sowa N.K, 2002. An Assessment of Poverty Reducing Policies and Programmes in Ghana.

Ghana Shared Growth and Development Agenda, 2010-2013. Vol 1

Growth and Poverty Reduction Strategy Paper, Annual Progress Report, 2006




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Image credite: Ghana portal

2020-10-07 21:16:45

Source: ILAPI