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Introduction
Health care financing involves the mobilization, accumulation and disbursement of financial resources to meet the health care needs of a country's populace. It is typically financed through private expenditure, public expenditure or donor support. Public expenditure on health is obtained from tax revenue and social health insurance (SHI) contributions. On the other hand, private expenditure on health involves payments for health care made out-of-pocket (OOP) and private health insurance (PHI) premiums (Uzochukwu et al., 2015). Although an overarching goal of health care financing is the provision of resources for the health sector, it is also a veritable policy tool for reducing the income gap between the poor and the non-poor, especially in developing countries tackling the problem of income inequality (Ataguba et al., 2019).
Nigeria continues to have one of the highest figures of income inequalities in Africa. On the average, the Gini coefficient, which is a measure of income inequality in last five years, was approximately 0.49. The nation's income distributive share by income quintile further revealed that the poorest 20% of the population shared only 5% of the nation's total income compared to 49% shared by the top 20% of the population (World Bank, 2019). These figures confirm the wide income disparities between the poor and non-poor in the country. This grim situation shows that public health care funding remains grossly inadequate, accounting for an estimated 20% of the total health care funding, while private health care payments constitute the largest share of health care financing in the country. OOP payments for health care, which constitute the bulk of private health financing, account for approximately 69% of total health care funding in the country (World Bank, 2019). The direct health care payment estimates far exceed the 15% threshold beyond which household risk shifts toward poverty.
Given the limited public funding of health care, the incidence of direct health care funding in Nigeria rests disproportionately on the poor households. These households, in comparison to their wealthy counterparts, spend about 9 times more of their per capita total expenditure on OOP health care (Olaniyan et al., 2013). This indicates that inequities could exist in the Nigerian Health care financing system. These inequities are marked by individuals with similar income making different...