Thinking Out Loud: Could This Be The Right

Time to Disband The NHIF?

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Rutashubanyuma Nestory 09/03/2024 1:31 PM 1:32 PM

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The National Health Insurance Fund (NHIF) is dying a natural death; few are even aware
it is collapsing under its own weight. NHIF is imploding, but policymakers still believe
they can fix the mess that is nibbling it inside out.

National Health Insurance Fund is the outcome of a 1990-1992 study on the long-term
options for financing health services in Tanzania. An Act of Parliament established it:
Act No. 8 of 1999. The scheme commenced operations on 1st July 2001 when
members and their respective employers started contributing. Some of the principles in
establishing the NHIF were:-

Strengthening cost sharing in government health facilities by providing an

opportunity for formal sector employees to contribute.
Providing health insurance to employees in the formal sector, especially after the
introduction of user fees.
Allowing free choice of providers to civil servants — who were previously restricted
to government health facilities.
Enhancing health equity among employees in the health sector.
Providing an environment for the growth and participation of the private sector.

The scheme is compulsory and covers all public sector employees. However, the Fund
covered only Central Government employees in the first two years of operations. In
2002, the membership base was extended to cover all public servants in a move to
widen coverage until all formal sector employees were covered. The membership
includes principal members, their spouses, and up to four children and/or legal
dependants.

Where both a couple (man and woman) are workers in the public service, they have
equal rights to register four different children or dependants. The scheme has no option
for opting out. The Minister of Health has been empowered under existing legislation to
determine any other category of workers to become members of the scheme with a
view to enhancing the Fund’s membership. The scheme may eventually include optional
members.

Read related: Is healthcare a Human Right or a Privilege?

The NHIF Act section 30 (j) empowers the Board of Directors to review and make some
improvements to the benefit package, including a review of the rates used to reimburse
the health care providers. At the inception of the scheme, the benefit package included:
Registration fees – fixed per visit per level of health facility; Basic diagnostic tests;
Outpatient services which include payment of examinations and all drugs prescribed
for its beneficiaries in both private and public hospitals, provided that the Fund
accredits the hospitals or health facilities. The medication prescribed should be from
the list of essential drugs.

The prescriptions should be generic where available. In-patient services include

accommodation, medication, examinations, investigations and surgery, which range
from minor to super-specialized surgery. The Fund benefit package is progressive and
subject to an actuarial assessment that is done every year and the actuarial valuation
that is done every three years. The Fund has already increased the benefits offered to
beneficiaries and enhanced reimbursement to providers. A referral letter from lower
levels is required to access higher-level health facilities.

Under section 15 (1) of the NHIF Act, the Fund is obliged to issue an identity card to
every registered member. However, for the identity card to be issued, members are
required to correctly fill out NHIF registration forms and pass them to the employers for
certification before being sent to the Fund offices. Likewise, the Fund is required to
produce identity cards and distribute them to employers to be handed over to
members.

The Fund devised a special NHIF “sick sheet” to be used with the employers’ identity
cards whenever members must access services from accredited health facilities. As of
31st January 2005, the Fund had produced and distributed 946,153 (83.1%) Identity
cards out of 1,142,378, which is expected to be produced if all members submit their
forms to the Fund offices. No beneficiary can access health care services without the
NHIF Identity card.

The contribution rate provided in the Act establishing the Fund is 6% of the monthly
employee’s gross salary (met equally by both employer and employee, i.e. 3% each).
The Act provides for a penalty of 5% to the Employer who delays remitting
contributions to the Fund. Employers must remit contributions to the Accountant
General’s Office (Ministry of Finance-Treasury), and then the Ministry of Finance directly
pays into the National Health Insurance Fund.

Providers are reimbursed through a fixed fee per service; however, the Fund
Administration is expected to gradually move to capitation as the business volume and
the benefit package’s complexity increases.

The National Health Insurance Fund (NHIF) Act of 2023

By the time the new NHIF Act of 2023 was being enacted, only 8% of the people were
insured. The legislation was overambitious and did not consider the weighty
managerial difficulties of running a health scheme that covered employees with
assured sources of meeting their contributory obligations. Now, the floundering NHIF
has been overburdened with new responsibilities of insuring everyone else with over
80% of new members without a stable income or means of clearing their contributions.
The rewritten law was dead, buried and rotting on arrival.

Read related: Insuring Brighter Future: Exploring the Tanzanian Insurance Sector.
Extortionate rates also remind us that our political class is insulated from the harsh
realities of their countrymen. The rates to meet NHIF memberships are higher than
what an average family spends on health per year. So, sanity demands that enrollment
rates be low despite the law commanding everybody who is not a senior citizen of 65
years and above to enrol.

An average family will consider the math and see they are better off without NHIF
enrollment, weakening the whole concept behind universal health coverage, which was
to lower health costs, widen health access, and crater the poor working conditions of
medical workers. The World Health Organization (WHO) estimates an unacceptable
ratio of one doctor to 100,000 patients. That rate is unlikely to change under the
debilitating law the Parliament has passed.

The new NHIF law was silent in plugging huge leaking holes, as the CAG report (2022)
pointed out that NHIF employees had converted the fund into a personal enrichment
scheme. The CAG said over Tshs 41 billion was loaned to the NHIF staff, which are the
members’ contributions for personal use!

The NHIF modus operandi is aiding in hiking up the rates each member coughs up. The
contributions that NHIF employees lend to themselves do not attract commercial
interest payments, weakening our banking sector in the process. One thought the
Parliament would have closed this spigot that is draining money earmarked to cover
health insurance and improve the working conditions of the medical workers.

The CAG report also said that the government has exempted senior citizens from
paying NHIF contributions without covering their costs. NHIF pays for them, but the
government does not reimburse the NHIF. The NHIF solution has been to ramp up the
contribution rates to make ends meet. As the rates keep skyrocketing, it becomes
uneconomical to run and sustain, leading to membership compulsion to trudge on. But
brute force has its limits, too.

Government employees from BoT, NSSF, TRA, TANAPA, TANROADS, TANESCO, NMB,
and others were urgently compelled to join the NHIF. Despite bringing in plenty of cash,
NHIF was ill-prepared to accommodate them. These new members had special needs,
such as VIP treatment, that demanded time to sort out. The ensuing mess should have
led to sanity to prevail, as NHIF has too much on its plate, and universal health
insurance was dead on arrival.

The Future of Universal Health Insurance

Well, facts need to be told now without twinkling of an eye. Universal health insurance
never worked anywhere so why clamour for an obvious failure? The only thing that
works is the creation of dummy government employees pretending to work for the sick
while, in reality, they care less about them but their own bellies. The NHIF rates given to
health providers are too low to meet minimum costs as a result they are shunning
being pushed out of business to prop up a lie.

Every time you hear a mandatory law, just remember that it is fighting the powerful yet
hidden hand of the market. Nobody can defeat the market, and we have a litany of
experiences from Ujamaa utopia to prick our guilty conscience.

The real solution to medical access and affordability lies in free, government-owned
health services. Nobody says anything about the wage bill that NHIF gobbles up every
day for interference with market forces. That wage bill should be redirected to free
medical services where it matters most.
Market forces have been talking as health service providers are shunning this NHIF
titanic, and our beloved minister for health and her assistants are clenching their fists
for a fight, threatening those medical providers with consequences that include
pecuniary and closures.

These providers have committed an offence by heeding the powerful hand of the
market, which is sensible.
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Simon Gordon  1 month ago

Well said. 41 Tshs Billions is something to consider bringing back;

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