Unlocking Accessible Healthcare: An In-Depth Look at Nigeria’s Health Insurance Landscape
Nigeria’s journey towards robust healthcare access is intrinsically linked to the expansion and effective implementation of its health insurance programs. Lekan Ewenla, Managing Director and Chief Executive Officer of Ultimate Health, a prominent Health Maintenance Organisation, shares insights into the transformative potential of health insurance, the hurdles hindering widespread adoption, and the strategic pathways to elevate the nation’s health outcomes.
The Fundamental Promise of Health Insurance
Globally, health insurance has proven to be a cornerstone of accessible and quality healthcare. In nations where it has been a long-standing mandate, individuals benefit from unhindered access to a defined spectrum of medical services. This access is particularly crucial at the primary healthcare level, which accounts for approximately 80% of all healthcare interactions. The core objective behind introducing health insurance in Nigeria is to render healthcare not only affordable but also universally accessible and equitable. The inherent reality is that healthcare is a significant expense, and out-of-pocket payments are unsustainable for the majority. Health insurance, therefore, is designed as a mechanism for cross-subsidisation, where the contributions of the healthier and wealthier segments of society help to cover the medical needs of the less fortunate and those who are ill. The ultimate aim is to fundamentally alter Nigeria’s often-grim health statistics by ensuring that every citizen can receive the quality care they require without financial distress. Enrolment typically provides coverage for a full 12-month period.
Key Milestones in 2025: A Push for Mandatory Enrolment
A significant development in the health insurance sub-sector during 2025 was the direct intervention by the nation’s President, who underscored the imperative for all outstanding Federal Government ministries, departments, and agencies (MDAs) to immediately enrol their employees in the public sector health insurance programme. This directive was further solidified by a circular issued by the Secretary to the Government of the Federation on September 14, 2025, to all MDAs and other key stakeholders. This mandate specifically targeted income-generating federal institutions that had, in the past, opted for private health insurance schemes for their staff instead of the government-backed social health insurance programme.
The issuance of this circular marked a critical achievement for the country and the health insurance sector. This was particularly significant given that the bill mandating health insurance was legislated into law in 2022. For stakeholders in the health insurance industry, achieving widespread, strategic enrolment has been a persistent challenge, largely attributed to a historical lack of adherence to established laws by citizens. The President’s directive served as a strong reinforcement of the legal framework and the necessity for compliance.
Expanding the Directive: Impact on the Private Sector
The government’s mandate was not confined solely to federal MDAs; it extended its reach to encompass the organised private sector. The directive stipulated that every employer of labour should make concerted efforts to enrol their workforce in a health insurance programme. Following enrolment, employers are required to obtain a certificate of compliance from the National Health Insurance Authority (NHIA) for verification and record-keeping. Under this directive, private companies are expected to facilitate the enrolment of their employees through their designated Health Maintenance Organisations (HMOs). The HMO then formally applies for a certificate of compliance on behalf of the company.
Crucially, the law stipulates that any employer with a workforce of five or more employees is legally obligated to enrol their staff in a health insurance scheme. This translates to employers being responsible for allocating a medical allowance alongside regular salaries, which is then effectively converted into a health insurance premium for all employees. This provision is mandatory for all staff members within eligible organisations.
Dispelling Misconceptions: Health Insurance and Employee Finances
Contrary to potential concerns, health insurance is not intended to impose an undue financial burden on employees. As previously stated, the responsibility for the medical well-being of employees rests with the employer. Enrolling staff in health insurance is not a gratuitous act but a legal obligation for employers of five or more individuals. The medical allowance provided to employees is precisely the fund designated to be converted into health insurance premiums. This process is not designed to create financial strain for employers; it is a reallocation of existing compensation.
Beyond Access: The Broader Benefits of Health Insurance
The positive ramifications of a robust health insurance system extend far beyond individual access to care. It acts as a powerful catalyst for the accelerated transformation of healthcare infrastructure. The collective premium payments from millions of Nigerians will translate into substantial financial inflows into the healthcare industry, estimated to be in the trillions of Naira. This influx of capital will inevitably drive significant investment in the sector. A key factor contributing to the emigration of Nigerian doctors and nurses is the lack of robust healthcare systems in their home country, a situation often exacerbated by the absence of mandatory health insurance. Countries that have long embraced mandatory health insurance have not only improved healthcare access but have also seen an enhancement in the overall remuneration of healthcare professionals. Nigeria can achieve similar positive outcomes by embracing this model.
Navigating the Obstacles: Challenges to Growth
Despite the clear advantages, several impediments hinder the widespread growth and deepening of health insurance enrolment in Nigeria. A primary challenge is the pervasive lack of “top-of-mind” awareness regarding health insurance and its benefits. While significant efforts have been made, such as the “Re-emerging Health Care Financing in Nigeria” programme held in Abuja, the need for continuous and strategic public awareness campaigns remains paramount. Regulatory bodies like the NHIA and industry stakeholders, including HMOs, are urged to intensify media outreach to educate Nigerians about the extensive benefits they stand to gain from health insurance enrolment. Once the populace fully understands these advantages, demand for enrolment will naturally increase.
Furthermore, a comprehensive blueprint for achieving Universal Health Coverage (UHC) in Nigeria, titled “One Nation, One Health,” has been developed by Nigerian experts both domestically and in the diaspora. This document advocates for a uniform basic health plan across all 36 states and the Federal Capital Territory (FCT). It also identifies 83 million vulnerable Nigerians and recommends allocating 2% of the Federal Government’s consolidated revenue to provide essential healthcare services for this demographic, aligning with the concept of the Basic Health Care Provision Fund. The proposed universal basic plan aims to ensure that all Nigerians receive consistent quality and quantity of healthcare services nationwide. Private health insurance schemes commonly adopted by organised private companies and income-generating federal agencies are considered complementary or supplementary packages, underscoring the foundational importance of the basic health plan for every Nigerian.
A strategic element of the Federal Government’s approach is the utilisation of health insurance enrolment to build a unified national database. This is why the National Identity Number (NIN) is a mandatory requirement for registration in the health insurance programme.
A critical missing piece in the current landscape is the full understanding and commitment from state health insurance agencies, driven by state governors. A concerted effort is needed to revisit the drawing board and ensure the adoption, introduction, and effective implementation of the basic health plan across all states. This foundational step is essential for fostering substantial growth in health insurance.
Another significant hurdle arises from the historical approach of the organised private sector, which has predominantly opted for purchasing private health insurance products from HMOs. This approach has proven unsustainable for many, as a substantial portion of the organised private sector, individuals, and Small and Medium-scale Enterprises (SMEs) find private health insurance products unaffordable. The law, however, advocates for enrolment in the basic plan, which is generally affordable and rich in benefits. The recommended pathway is for all entities to enrol their workforce in the basic plan first. Subsequently, individuals or organisations can opt for supplementary or complementary plans if desired. Under the revised legal framework and to streamline operational processes, the NHIA is now mandated to approve and assign codes to all supplementary and complementary products offered by HMOs before they are made available to the organised private sector.
It is crucial to reiterate the distinction between health insurance and healthcare services. Health insurance is fundamentally about managing health risks by pooling resources and providing defined services at an agreed-upon premium. Healthcare services, conversely, refer to the actual delivery of medical care within a facility at a fee determined by the provider. While healthcare falls under the concurrent legislative list in Nigeria’s constitution, health insurance is exclusively regulated by the NHIA, with no state government having the authority to regulate it.
