Ghana’s National Health Insurance Scheme (NHIS) is one of the most enviable social intervention schemes in the health sector amongst peer countries in sub-Saharan Africa.
The scheme draws about 70% of its revenue through from 2.5% of VAT revenues generated from the economy. The rest comes from employees’ 2.5% of SNNIT contributions, premiums paid by clients in the informal sector and incomes from NHIA’s investment activities.
Since its inception, revenues from these sources have never matched up to the cost of healthcare under the scheme, and this has mitigated against the smooth running of the scheme.
The current NPP government on March 3, 2017, announced the abolishment of several levies and taxes of which some included percentages for the NHIS. The government, however, called the abolished levies and taxes as ‘nuisance taxes’ which, according to officials, unnecessarily affected the cost of doing business but generated less significant tax revenues. Whatever the intent this strategy is for, some revenues towards the NHIS is lost.
In the 2017 mid-year Fiscal Policy Review presented to Parliament on Monday, July 31, the government revised the budget deficit target from 6.5 percent to 6.3 percent citing lower than anticipated Corporate Income Tax, Import VAT and Import Duty over period.
In that regard, planned expenditure has been revised accordingly. The revision in government expenditure, nonetheless, is expected not to affect NHIS and other social intervention programmes, according to the Finance Minister, Mr. Ken Ofori-Atta. Reduction in Import VAT revenues implies lower revenue for the NHIS; widening the revenue-expenditure gap of the scheme.
A report by Dr. Chris Atim, the chairman of former President John Maham's NHIS Technical Review Committee (2016), indicated that there is an increasing reliance on health spending on NHIS from the coffers of the Ministry of Health (MoH).
In 2014 alone, MoH contributed about 60 percent of the total government health expenditure while NHIS catered for rest 40 percent. For how long could this be sustained?
Insurance premiums have relatively remained constant over time in the face of rising cost of health care. Several premium-exempted but high-risk individuals including pregnant women, children under 18, the aged over 70 years and the indigent of society continue to enroll onto the scheme in higher proportions. On the other hand, low-risk individuals continue to drop out of the scheme by failing to renew their insurance when they expire; they only renew when there is high probability or certainty of ill-health. These are posing real-time sustainability challenges to the NHIS in the country.
Our government must be swift: policymakers must act to lessen the drying coffers of the NHIF and its attendant healthcare provider complications.
One way of ensuring that low-risk individuals do not drop out of the scheme leaving mostly high-risk individuals is to ensure household enrollment rather than individual enrollment.
This makes risk pooling effective. Furthermore, the government must find other sources of funding or perhaps as indicated by the Pharmaceutical Society of Ghana (PSGH) an increase from 2.5 percent to 3.5 percent of the 17.5 percent VAT tax. By all means possible, our National Health Insurance Scheme must become better to become the best we wish for.
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