The recent threat by the Lagos State government to cut all state services to residents and employees who fail to enrol for the state health insurance plan may be an overreach, but it has a potential of numerous benefits while also containing significant risks.

This decision by the government, in a bid to cure a syndrome it described as Nigeria’s “cash-and-carry” healthcare system, where citizens pay directly for treatment from their pockets, definitely calls for a rethink.

First, it should be stated that a government policy that enforces mandatory health insurance through enrollment in a scheme like Ilera Eko, by conditioning public services on compliance, amounts to a fundamental structural shift.  At an event where the state government unveiled sweeping healthcare reforms that could make health insurance compulsory for residents seeking government services, the state government maintained that a staggering N100 billion funding shortfall was clearly a threat to the state’s healthcare system.

The state Commissioner for Health, Prof. Akin Abayomi, therefore disclosed that Ministries, Departments and Agencies (MDAs) have commenced implementation measures requiring residents to show proof of accredited health insurance before accessing certain government services.

This move, which stems from Governor Babajide Sanwo-Olu’s Executive Order domesticating the National Health Insurance Authority Act and making health insurance mandatory for all Lagos residents, is consequent upon the state’s admission that it “cannot continue with a situation where people pay out-of-pocket each time they fall sick. That model is unsustainable.”

Lagos currently spends about eight per cent of its budget on healthcare, far below the 15 per cent benchmark enshrined in the Abuja Declaration, but by domesticating the National Health Insurance Authority (NHIA) Act through an Executive Order to tackle the N100 billion healthcare deficit, the state appears bent on ending out-of-pocket medical expenses, which presently make up about 77 per cent of the country’s total healthcare spending.

It has also, by domesticating the law, operationalised the NHIA Act of 2022, which formally mandates health insurance across Nigeria. And since social health insurance depends on risk pooling with the healthy effectively subsidising the sick, and higher earners helping to cushion the poor, the mandatory enrollment builds a massive pool of funds that reduces average costs for everyone.

With the out-of-pocket for unexpected medical emergencies serving as a major driver of urban poverty, minimising or doing away with cash barriers at point-of-care protects households from bankruptcy and the like.

While the benefits of health insurance are understandable, Lagos needs to go slow because millions of its residents are jobless, let alone have a means of payment.

As much as moving away from an archaic “cash-and-carry” healthcare model is critical to long-term health equity, Lagos’ decision to take tough and necessary steps toward Universal Health Coverage (UHC) via blocking access to government services in order to enforce compliance has the tendency to inflict unintended harm on vulnerable populations.

Even though out-of-pocket spending now appears a failed model, healthcare remains a human right, and public services are civic rights; hence withholding public services hostage to compel insurance enrollment risks penalising the poor for their poverty rather than protecting them.

As long as mandatory insurance is sound in principle, Lagos must do all that it takes to fix its healthcare delivery infrastructure, while also fully funding equity funds for the indigent before restricting public service access.

When mandatory policies are laced with service denial threats, public pushback, which focuses on fairness, system capacity, and trust, must be expected.

Presently, the state-owned Ilera Eko scheme is embroiled in allegations of offering substandard services as enrollees frequently report putting up with a cocktail of challenges ranging from out-of-drug syndrome to long wait times, rejection by empanelled private and public hospitals under the scheme, as well as poor customer service.

These complaints, which spread like wildfire, also include knotty issues like claims that the basic package covers minimal treatments, thereby forcing patients to continue to pay out of pocket, a development which defeats the purpose of the health insurance scheme.

With the strangulating socio-economic milieu occasioned by general inflation and economic hardship, the state government mandating health premium payments without a well-oiled scheme that delivers excellent services simply feels like an extra tax burden. Indeed, residents are bound to feel shortchanged, or feel that they are paying twice – first through compulsory premiums and second, through out-of-pocket payments when hospitals lack medications or equipment.

The vagueness that beclouds which provider accepts which plan; complaints resolution; and what treatments are fully covered are some sore thumbs that plague the government’s scheme.

The state government should, therefore, spare no efforts in ensuring that improved services are available across both private and public primary healthcare centres. Appropriate sanctions should also be meted out to HMOs and facilities that discriminate against or turn away Ilera Eko patients.

Emphasis on making money at all costs from these schemes must be jettisoned, while supply lines for essential medicines in empanelled hospitals should be guaranteed so that enrollees don’t leave empty-handed or resort to purchasing compromised medicament from questionable sources.