AN EVALUATION OF THE IMPACT OF HEALTH INSURANCE POLICY TO INDIVIDUALS

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgment

Abstract

Table of content

CHAPETR ONE

1.0   INTRODUCTION 

1.1        Background of the study

1.2        Statement of problem

1.3        Research questions

1.4        Objective of the study

1.5        Significance of the study

1.6        Scope of the study

1.7       Definition of terms

CHAPETR TWO

LITERATURE REVIEW

2.1 introduction

2.2 conceptual review

2.3 empirical review

CHAPETR THREE

3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

Abstract

The research carried out is on an evaluation of the impact of insurance policy on individuals. Moving away from out-of-pocket (OOP) payments for healthcare at the time of use to prepayment through health insurance (HI) is an important step towards averting financial hardships associated with paying for health services in Nigeria. National health Insurance Scheme (NHIS) is a health care scheme established by the Federal Government of Nigeria in 2005 for better healthcare delivery to its populace. The trust of this study is to evaluate the impact of health insurance policy to individuals and to explore the level of satisfaction derived from their insurance cover by policy holder. Questionnaires were administered randomly to 300 adult respondents in the study area. The findings shows that not all adult can afford insurance cover as a result of low income and unemployment rate.

CHAPTER ONE

                                        INTRODUCTION

1.1 Background of the study

Several approaches abound in financing healthcare. These range from fees for service to private insurance, general taxation, social insurance, community financing, loans and grants. In Nigeria, combinations of all these in different proportions have been practiced for decades. The most basic form of health care financing is that of fees for service, where a fee is charged to cover all or part of the cost of the service provided. In many low and middle income countries a fixed fee for service, known as a user charge, is used by government health facilities, both as a means of raising revenue and as a means of discouraging what may be viewed as ’unnecessary demand’. This form of health care financing has a number of disadvantages. The direct payment of fees for service is regressive in that it causes the greatest hardship for the poor, and may cause major difficulties in payment for waged laborers, who are unpaid during sickness (Goodman, 1993).

The rising cost of health care services as well as the inability of the government health facilities to cope with the people’s demand necessitated the establishment of National Health Insurance Scheme (NHIS).  Health insurance is a social security mechanism that guarantees the provision of needed health services to persons on the payment of some amount at regular intervals. It is designed to pay the costs associated with health care by paying the bills and therefore to protect people against high cost of health care by making payment in advance of falling ill. The scheme therefore protects people from financial hardships occasioned by large or unexpected medical bills. It saves money on the short run and protects the poor from medical conditions that can lead to greater loss of money on the long run (Nigerian Tribune, 24, May, 2010). It involves pooling of resources from persons of different illness-risk profiles and the cost of the risk of illness among those who are ill and those who are healthy, are shared. It has three main characteristics- prepayment, resource pooling and cost-burden sharing. Pre-payments under the scheme are fixed either as a proportion of the pay-roll, or as flat rates contributed by the participants. This means that payment is not proportional to the risk of illness of individual beneficiaries.

The start of the NHIS dates back to 1962 when the need for health insurance in the provision of health care to Nigerians was first recognized (Akande and Bello, 2002; Katibi and Akande, 2003). The Nigeria Health Insurance program came into existence under Act 35 of 1999 constitution. Although enacted in 1999, it actually began its operation in 2003, covering initially only the Federal Civil Servants or Public workers by a compulsory participation, where access to healthcare was secured by a pool of contributions from both employees and employers, with the creation of a health scheme to serve the Nation, referred to as National Health Insurance Scheme (NHIS) a government parastatal directly tasked with the regulation and management of pooled contributions, alongside managing other stakeholders involved in the scheme. This is achieved by the National Health Insurance Council (NHIC) a board under the NHIS, which ensures the accreditation of Stakeholders such as; Health maintenance organizations (HMOs), health care providers (HCP), and registration of subscribers. Over the years, the NHIS had expanded its scope and currently operates the following schemes; formal sector health insurance programme, informal sector health insurance programme and vulnerable health insurance programme. Their healthcare coverage include outpatient care, prescription drugs, pharmaceutical and diagnostic tests as provided in National Essential drug list or the Diagnostic Test lists. It also coves maternity care for four (4) live births, preventive care inclusive of immunization, health education, family planning, antenatal and post-natal care. It also covers specialist’s consultation fees, hospitalization not more than cumulative 15days per year, eye examinations excluding spectacles and contact lenses. It covers a range of prostheses, preventive dental care and pain relief.

1.2 STATEMENT OF THE PROBLEM

The Nigeria Insurance Companies was characterized by Under capitalization, dearth of human capital and professional skills, poor return on capitals, prominent of unethical practices, non-prompt payment of claims, low GDP per capital figures, lack of innovation in product development, lack of awareness on the part of the consumers on the uses/suitability of insurance products etc. These problems lead to the development in Nigeria whereby all existing properties at the Federal, State and Local government levels are less that 10% insured while household items have insignificant proportion of insurance with more than 70% of private property , businesses and individuals uninsured. These gaps in the underwriting of insurable risks for economic growth have remained wide up till today due to the failure of various consolidation policies of the government. These concerns underscore the need for this study. Therefore, this is expected to stimulate the minds of policy makers in the insurance industries, the need to formulate credible policies that will guarantee insurance underwritings for all Nigerians and their property. Many of the researchers on the evaluation of the impact Insurance companies’ consolidation to economic growth has provided a fertile interface between economic theorists and empirical economists. In most cases, conclusions from such studies attempt to link the risk management systems of the insurance industries through their risk taking abilities that are capable of eliciting innovation for the growth and development of an economy. This is achieved when insurance companies pools investible funds by offering risk management services relating to life, business and market activities for insurance premium.

1.3 OBJECTIVE OF THE STUDY

This study has two objectives; the general objective and the specific objective; the general objective is to evaluate the impact of insurance policy on individuals, the specific objectives are;

1. i) To examine the rate at which individuals undertake insurance policy (health) in Nigeria
2. ii) To ascertain if there is any relationship between health insurance policy and the general wellbeing of individuals in Nigeria

iii) To ascertain the impact of individual insurance policy on the growth of insurance business in Nigeria

1. iv) To proffer suggested solution to the identified problem

1.4 RESEARCH QUESTIONS

The following research questions were formulated by the researcher to aid the completion of the study;

1. i) Does the rate at which individuals undertake insurance policy (health) in Nigeria influences the growth of insurance business?
2. ii) Is there any impact of individual insurance policy on the growth of insurance business in Nigeria?

iii) Is there any relationship between health insurance policy and the general wellbeing of individuals in Nigeria?

1.5 RESEARCH HYPOTHESES

The following research hypotheses were formulated by the researcher to aid the completion of the study;

H₀: There is no significant relationship between health insurance policy and the general wellbeing of individuals in Nigeria

H₁: There is a significant relationship between health insurance policy and the general wellbeing of individuals in Nigeria

1.6 SIGNIFICANCE OF THE STUDY

It is believed that at the completion of the study, the findings will be of great importance to the management of insurance companies, as the findings will aid in better policy formulation that will aid greater participation of individual in insurance cover, the findings will also enhanced better implementation of the national health insurance scheme in Nigeria, the study will also be useful to researchers who intend to embark on a study in a similar topic as the findings of the study will serve as a reference point to further research. Finally, the study will be of significance to student, teachers, academia’s, lecturers and the general public as the study will contribute to the pool of existing literature on the subject matter and also contribute to knowledge on the subject matter.

1.7 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers an evaluation of the impact of insurance policy to individuals, but in the cause of the study, there are some factors that limit the scope of the study;

AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study

TIME: The time frame allocated to the study does not enhance wider coverage as the researcher have to combine other academic activities and examinations with the study.

FINANCE: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.

 1.8 OPERATIONAL DEFINITION OF TERMS

Insurance

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

Insurance policy

In insurance, the insurance policy is a contract between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.

Health insurance

Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons

NHIS

The National Health Insurance Scheme (NHIS) took off in the year 2005 and is a corporate body established under Act 35 of 1999 Constitution by the Federal Government of Nigeria to improve the health of all Nigerians at an affordable cost through various prepayment systems

1.9 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.

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