Ghana’s National Health Insurance Scheme (NHIS), launched in 2004, was conceived to eliminate point-of-care payments and achieve universal health coverage within five years. Underpinned by a mutual and private insurance framework regulated by the National Health Insurance Council, the scheme is financed through a value-added tax top-up, contributions from formal sector workers, and member premiums. Despite its rapid growth, concerns over member retention and financial viability have emerged as central threats to its sustainability. This article examines how initial enrollment influences continuous membership and identifies the major constraints undermining the scheme’s endurance.
The study applies expected utility theory to explain households’ decisions regarding health insurance enrollment and renewal. According to this theory, individuals choose to enroll or renew only if the utility gained from financial risk protection outweighs the cost of premiums and perceived service benefits. A key limitation of this framework is its inability to fully account for status quo bias, where individuals resist change to their current health arrangements but it remains a robust tool for analyzing sequential decisions on enrollment and retention. The interdependence of these decisions necessitates methods that correct for selection bias to yield unbiased estimates.
Analysis draws on the nationally representative Ghana Living Standards Survey Round 7 (2016/2017), which sampled 14,009 households across rural and urban districts. Enrollment status was captured by the question “ever registered for health insurance,” while retention status reflected “currently registered.” To correct for endogeneity arising from the interrelated nature of enrollment and retention, the study employed the Heckman probit estimation technique, which models a latent selection equation for enrollment and an outcome equation for retention. This two-step procedure generates an inverse Mills ratio to adjust for unobserved factors that jointly influence both decisions.
NHIS enrollment surged from 15.4 percent in 2005/2006 to 67.6 percent by 2016/2017, reflecting enhanced public education and scheme familiarity. In contrast, retention exhibited a decline from an initial 97.9 percent to 67.6 percent over the same period, signaling challenges in sustaining membership after the first registration. These divergent trends underscore the importance of understanding the drivers that convert one-time enrollees into continuous subscribers.
|
Survey Round |
Enrollment Rate |
Retention Rate |
|
2005/2006 |
15.4 percent |
97.9 percent |
|
2016/2017 |
67.6 percent |
67.6 percent |
Source: Ghana Living Standards Survey Rounds 5 and 7
The probability of retaining NHIS membership increases with factors such as female gender, marital status, higher educational attainment, urban residence, and greater household expenditure. Older individuals demonstrate higher renewal rates, consistent with declining health stocks over the life course. In contrast, larger household sizes and younger age cohorts deter continuous membership, likely due to financial constraints and lower perceived immediate health risks. Wealth quintile effects reveal that poorer households are more motivated to retain coverage to avoid out-of-pocket payment, while middle-income groups show more variable renewal behaviors.
Financial barriers emerge as the primary reason for non-renewal, cited by 66.6 percent of former members, followed by perceived poor service quality (12.5 percent) and lack of education on renewal procedures (11.9 percent). The financial constraint is more pronounced among rural non-retainers (75.4 percent) and female non-retainers (69.1 percent), whereas urban non-retainers more frequently attribute lapses to inadequate information and dissatisfaction with care. These findings highlight the need for targeted subsidy policies and improved service delivery to bolster scheme loyalty.
The positive impact of initial enrollment on subsequent retention, confirmed by a significant inverse Mills ratio, demonstrates that early engagement is crucial for long-term sustainability. However, systemic gaps in facility maintenance, timely claim reimbursements, and community outreach threaten the scheme’s resilience. Addressing these structural challenges requires a multi-pronged approach: subsidizing premiums for the most vulnerable, streamlining administrative processes, and strengthening quality assurance mechanisms within NHIS-accredited facilities. Equally important is enhancing financial literacy and simplifying renewal workflows, particularly in underserved rural areas.
Ensuring the NHIS remains a viable pathway to universal health coverage hinges on coordinated policy action. The government should prioritize premium exemptions or subsidies for low-income and youth demographics, while intensifying supervision of service providers to elevate care standards. Public education campaigns must emphasize renewal deadlines and benefits entitlements to reduce enrolment-retention gaps. By reinforcing financial protection mechanisms and promoting trust in the health system, Ghana can safeguard the NHIS as an enduring pillar of equitable healthcare access.
