A Review of the National Health Insurance Scheme and the Possibility of a Single Premium for a Decade

Bachelor Thesis, 2010

37 Pages






1.0 Background
1.1 The history of the Kassena-Nankana District Mutual Health Insurance Scheme
1.2 Problem Statement
1.3 General objectives
1.4 Justification
1.5 Hypothesis
1.6 Scope and expected outcome

2.1 Insurance
2.2 Critiques of the NHIS
2.4 Chapter summary

3.1 The research design
3.2 Qualitative data technique
3.3 Quantitative data technique
3.4 The population of the study
3.5 The Sample Size of the Study
3.6 Data collection techniques
3.7 Chapter summary

4.1 Background of the respondents
4.2 Membership profile
4.3 Designing a model for the single premium calculation
4.4 The sufficiency of the net single premium to provide for the claim
4.5 The probability that the net single premium will cover the claim (feasibility)
4.6 Chapter summary

5.0 Introduction
5.1 Summary of findings
5.2 Recommendations
5.3 Chapter Summary




This research is dedicated to my parents: Mr. Francis Kingsley Mensah-Aborampah and Mrs. Philomena Buadoo. And final dedication goes to Mr. Samari David (Scheme Manager, Kassena-Nankana District Mutual Health Insurance Scheme) whose support and encouragement motivated me to this height.


The research reviewed the National Health Insurance Scheme and accessed the possibility of a single premium for decade. The whole research had its foundations from the specific objectives which were; to access the possibility of a single premium for a decade that is feasible enough to sustain the scheme, to identify alternative means of generating income to sustain the Kassena-Nankana District Mutual Health Scheme and to assess the perception of registered and potential clients on the NHIS. The research design employed was statistical survey and both qualitative and quantitative data were collected from a sample of fifty respondents. The research study has its justification from the current government’s intention to implement a single premium system for the NHIS. The main hypothesis that “A single premium is feasible to improve healthcare in Ghana” was accepted with some few actuarial assumptions being made. The research findings emphasized the inclusion of age distribution as key variable to avoid all ages paying the same premium. Problem like moral hazards was addressed in this study and advocacy was suggested as a way of curbing it down. The administrative and accounting systems of NHIS must be fully computerized to help reduce the stress of working manually. Advocacy was also suggested as a solution to the problem of clients going for medications for non registered clients with their NHIS card.

Keywords; Insurance, Single premium, Health Inurance, Premium.


I thank the Almighty God for providing me with the strength and knowledge to complete this course.

I am also indebted to a number of people who provided invaluable services in diverse ways towards the accomplishment of this task. Among them are: Mr. Yin Luu – Lecturer and Supervisor for the project for giving me a fatherly advice and guidance throughout the course of study.

I am also grateful to Mr. Solomon Sarpong – Acting Head Of Department (HOD) for being an inspirer, adviser and a mentor.

To Mr. Bankale Richard, I say many thanks for patiently being my guide and wonderful Lecturer for the four years of my academic study in the University.

I would also like to acknowledge my colleges and friends (Mr Ridwan Rufai.D and Mr. Mensah William,) for giving me their books for the research study. The Bolgatanga Municipal Library staff cannot be left out for their cooperation during the course of study.


1.0 Background

The National Health Insurance Scheme (NHIS) is an insurance policy enacted by government in the early years of 2000 to eradicate the “cash and carry” system and provide a better health care for all Ghanaians.(Ghanaweb.com-4th march 2010)

Historically, the health insurance in Ghana started as far back as 1992 when the first Community Health Insurance (CHI) scheme was started by the St. Theresa’s Catholic Mission Hospital at Nkoranza. Agyepong Irene (2010). It proved popular and endured the test of time. In the mid 1990’s, a unit was created in the Ministry of Health to establish the National Health Insurance (NHI) as an alternative to “cash and carry” health care delivery system in the country. The unit focused its efforts and resources on consultancies and feasibility studies for a pilot Social Health Insurance (SHI) scheme for the formal sector and organized groups such as cocoa farmers in the Eastern Region.Agyepong Irene (2010)

By 1999, the proposed SHI pilot collapsed without insuring anybody. Following the demise of the Eastern Region pilot, the Social Security and National Insurance Trust (SSNIT) started planning for another centralized health insurance scheme to be run by a company called Ghana Health Care Company. Like the Eastern Region pilot, it never took off despite some public expenditure on feasibility and software. Agyepong Irene (2010)

Following intense consultations with Ghana’s international health development partners like World Health Organization (WHO), Danish International Development Agency (DANIDA) and International Labour Organization (ILO) and relevant national agencies and Non Governmental Organizations (NGO’s), the Ghana NHIS was established with theNational Health Insurance Actof 2003. The stated mission of the NHIS is “to ensure equitable universal access for all residents of Ghana to an acceptable quality of essential health services without out-of-pocket payment being required at the point of service use” (Ghana Ministry of Health, 2004a). The NHIS is regulated by the National Health Insurance Council (NHIC), headquartered in Accra. Regional and District offices of the NHIC are being set up to decentralize the operations of the Scheme. The Council manages the National Health Insurance Fund (NHIF) through the collection, investment, disbursement, and administration of the Scheme. The Council also undertakes the licensing, regulation, and accreditation of healthcare providers. By the end of 2007, the NHIS had accredited 800 private healthcare providers in addition to government health facilities. Ghana Ministry of Health, (2008).The bill that was passed into National Insurance Act (NHIA) of 2003, required everybody resident in Ghana to be insured in the government sponsored district Mutual Health Organizations (MHO) financing of the NHIS was to be by individual premium payments and a 2.5% National Health Insurance Levy (NHIL).Agyepong Irene (2010). A National Health Insurance Council (NHIC) was to govern the NHIS. The objective of the council according to ACT 625 was “to ensure the implementation of a national health insurance policy that ensures access to basic healthcare services to all residents”. Its responsibilities included registration, licensing and regulation of health insurance schemes and supervision of their operations. It was also responsible for granting accreditation to health care providers, monitoring their performance, and ensuring that healthcare services rendered to beneficiaries were of good quality. Agyepong Irene (2010). The current government stated in his manifesto for election 2008 that they were to going to find ways for Ghanaians to pay a single premium for a life time under the NHIS. NDC Manifesto (2008)

1.1 The history of the Kassena-Nankana District Mutual Health Insurance Scheme

The Kassena- Nankana District Mutual Health Insurance Scheme was started in 2003. Before the scheme kicked start, the District Task Force (DTF) and the District health team were tasked to start the sensitization of the NHIS in Kassena-Nankana.

In 2003, the legislative Instrument (LI) 1809 and ACT650 of the Health Insurance Act was passed by parliament.Officers were recruited for the NHISin September 2004 and the working staff took over from District Assembly in the same year.

The General Assembly (GA) then discussed on the formation of a constitution for the district health scheme on 23rd march 2005and appointment of the Board of Directors was carried out in April 2005.On 1st November 2005, the scheme began its maiden operations and management of claims in Kassena-Nankana District. Preliminary Field Survey (2010)

1.2 Problem Statement

Several problems have been identified by the administrators and clients of the National Health Insurance Scheme undertaken by the Kassena-Nankana District. The problem of NHIS in the Kassena-Nankana district is divided into three (3) main parts namely administrative, clientele and service providers’ problems.


*Premium collection by installments; Even though it is stated in NHIS constitution that an adult can pay his or her premiums twelve(12) equal installments, the administrators complain of difficulty in managing the installment payments. Therefore clients are always advised and encouraged to pay their premiums in full or in two monthly equal payments. Adults who are not able to pay their premiums at once or by installments more than two are discouraged from joining the scheme because of its administrative difficulty. Field survey (2010)

*High Tariffs; Tariffs are also so high that the Kassena-Nankana Scheme owes the health providers huge amounts of money. Field survey (2010)

Tariffs are the monies paid for the bills submitted by health providers under the NHIS. Due to the constant leveled premium, that is GH₵ 8 paid by both the rich and the poor in the community and increase in the population, there is high level of indebtedness since lots of people in the scheme and are not paying the right premium they should pay for the scheme to be sustainable.

*Difficulty in verifying the authenticity of clients by health providers; Since the National Health Insurance Scheme is networked, that is between the District Mutual Health Administration and the Health providers, if a hospital/clinical is not hooked up or linked by network, it makes it difficult to authenticate the validity of a member and to know if the member has renewed his membership or not.

*Inadequate Staff;There exist a problem of staff inadequacy at the Kassena-Nankana Mutual Health Centre and this makes them to rely on National Service personnel’s. Also, qualifiedstaffs for the job are not enough. (Field survey, 2010)

*Politics; Here, when there is a change of government, the management of scheme might be changed and this can negatively affect the effective running of the scheme because the new management might not continue with the effective strategies in place for the sustainability of the scheme in the district.


*Expensive Premium; Upper East is rated one of the poorest regions in Ghana, and most of the inhabitants particularly the indigenes consider the current annual premium of GH₵ 8 to be expensive. Field Survey (2010).

*Some people also have the view that they do not usually fall sick so there is no reason for registering under the NHIS. They rather see it to be waste of financial resources. Field Survey (2010)

*Moral Hazards; These are the problems intentionally caused by clients who wants to take advantages of the liberal systems of NHIS. Several cases have been reported where a whole family intentionally visits the hospital when they are not sick but because they have been registered under NHIS.

*Abuse of the system; Someclients donot continue with their medications as prescribed by doctors thereby wasting the remaining drug received under the NHIS. War Memorial Hospital, Navrongo (2010)


*Lack of quality health care;Due to the high patronage of the NHIS, the health facilities in the Kassena-Nankana district cannot match the number of registered clients thereby resulting in poor health care. The health providers are also not equipped very well resulting in deaths of registered clients.

*Inadequate drug provision; Hospitals are not also able to provide all the needed drugs for the registered patients and this results in they asking the patient to buy the unavailable drugs at the pharmacy and drug stores.Field Survey(2010)

1.3 General objectives

This study is aimed at finding out how the NHIS is performing in Kassena-Nankana District and the feasibility of a single premium for a decade.


1. To access thepossibilityof a possible single premium for a decade that is feasible enough to sustain the scheme.
2. To identify alternatives means of generating income to sustain the Kassena-Nankana District Mutual Health Scheme.
3. To asses the perception of registered and potential clients under the NHIS.

1.4 Justification

The NHIS plays an important role in providing accessible health care to Ghanaians and sought to eradicate the then concept of “cash and carry” in the health care delivery system. The government authorized a mandatory2.5% levy to be deducted from SSNITcontributors to augment regular premium that clients pay under the scheme. The study seeks to explore the prospects of the current government intension to implement a single premium system by assessing the viability and/or feasibility of a single premium that is sufficient to sustain the health insurance system for at least a decade.

1.5 Hypothesis

Ho; Asingle premium for a decade is feasible to improve health care in Ghana

H1;A single premium for a decade is not feasible to improve health care in Ghana.

1.6 Scope and expected outcome

This research will be carried out within the Kassena- Nankana District in the Upper East Region of Ghana. The research will involve fifty (50) inhabitants of Navrongo.

It is expected that at the end of the project, tangible and effective solutions to the administrative problems, client problems and health provider problems would be obtained.

The sustainability and viability of a single premium for a decade would be known and it’s projections given.

This project would also identify various ways by which the District can generate some funding to help support the scheme.

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A Review of the National Health Insurance Scheme and the Possibility of a Single Premium for a Decade
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review, national, health, insurance, scheme, possibility, single, premium, decade
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Charles Mensah (Author), 2010, A Review of the National Health Insurance Scheme and the Possibility of a Single Premium for a Decade, Munich, GRIN Verlag, https://www.grin.com/document/214793


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