- After 20 years, only 13% covered
- Millions pay medical bills out-of-pocket
Efforts to expand health insurance coverage are gaining traction, but deep structural gaps continue to slow progress toward universal healthcare access.
Recent data show enrolment in health insurance schemes rising from 19.2 million in 2024 to 21.7 million in 2025, representing just about 13 percent of the population, according to the 2025 State of Health of the Nation Report released by the Federal Ministry of Health and Social Welfare. The increase reflects ongoing reforms aimed at widening access to healthcare financing under the National Health Insurance Authority (NHIA) and the government’s health sector renewal programme.
Yet the latest figures also highlight the enormous challenge confronting the most populous black nation. With a population exceeding 200 million, more than 180 million Nigerians remain outside the formal health insurance system, leaving households heavily dependent on out-of-pocket payments to cover medical expenses.
Healthcare analysts warn that without stronger funding, effective enforcement of mandatory insurance policies, and greater public awareness, the gains in enrolment may do little to shield millions of families from the financial shocks associated with illness.
Government push for mandatory health insurance
The federal government says it has intensified efforts to expand health coverage through policy reforms and funding adjustments.
In 2024, President Bola Tinubu directed all ministries, departments, and agencies (MDAs) to enforce mandatory health insurance enrollment for their workers under the National Health Insurance Authority (NHIA) scheme.
The directive requires MDAs to present valid NHIA Health Insurance Certificates before participating in government procurement processes or obtaining official licenses and permits.
To strengthen compliance, the government also announced plans for a digital verification platform that will allow regulators to confirm the authenticity of insurance certificates.
In addition, the Basic Health Care Provision Fund (BHCPF) 2.0, launched in October 2025, enrolled about 2.7 million Nigerians by the fourth quarter of the year.
The report also notes that payments to healthcare providers have been significantly adjusted to reflect economic realities.
Capitation payments (fixed monthly fees paid to providers per insured patient) reportedly increased by 93 percent, while fee-for-service reimbursements rose by 378 percent.
The government says these adjustments are designed to improve the financial sustainability of healthcare delivery.
Efforts to strengthen maternal health services have also been expanded under the reform programme.
The National Health Insurance Authority signed agreements with more than 200 health facilities to provide Comprehensive Emergency Obstetric and Newborn Care (CEmONC).
According to the report, 242 facilities have been empanelled under the maternal health initiative, with 19,270 women receiving emergency care services nationwide.
Meanwhile, the government trained over 23,000 additional frontline health workers in 2025, bringing the total number trained in the past two years to 78,146, equivalent to 65 percent of the federal government’s target of 120,000 healthcare workers.
These initiatives are intended to strengthen healthcare delivery, particularly at primary healthcare facilities, which serve as the first point of contact for many Nigerians.
Healthcare still driven by out-of-pocket spending
Despite the progress recorded in the report, healthcare financing in Nigeria remains heavily dependent on direct payments by patients.
Data from the World Bank show that out-of-pocket payments accounted for nearly 75 percent of total health expenditure in 2024, one of the highest rates globally.
For millions of households, this means paying consultation fees, diagnostic charges, and medication costs directly, often at the point of care.
Healthcare experts warn that this financing structure exposes families to severe financial risk.
Studies indicate that health expenses push over one million Nigerians into poverty every year, while a quarter of households experience financial distress because of medical bills.
Rising healthcare costs are further complicating the situation.
Between 2024 and 2025, health insurance premiums increased significantly, ranging from eight percent to as much as 59 percent for higher-tier plans.
Hospitals have also raised tariffs in response to inflation, higher import costs for medical equipment and drugs, and increased operational expenses.
These cost pressures are forcing Health Maintenance Organisations (HMOs) to adjust premiums, making insurance less affordable for many Nigerians.
Healthcare analysts warn that unless the government introduces subsidies for vulnerable populations, higher premiums could slow enrollment growth.
Funding shortfalls remain a major constraint
Another major obstacle is the low level of government spending on healthcare.
Under the Abuja Declaration, African Union member states committed to allocating 15 percent of their national budgets to healthcare.
Nigeria has consistently fallen short of this target, with health sector spending averaging between four and five percent of the national budget.
Only six African countries (Liberia, Madagascar, Malawi, Rwanda, Togo, and Zambia), have achieved the 15 percent benchmark. Experts say Nigeria’s failure to meet this commitment has limited the government’s ability to expand health insurance coverage and strengthen health infrastructure.
Informal economy limits health insurance expansion
A key structural barrier to expanding insurance coverage lies in Nigeria’s labour market. According to the International Labour Organisation, about 93 percent of employment in Nigeria is informal.
Workers in the informal sector, including traders, farmers, transport operators, and artisans, typically earn irregular incomes and are not part of formal payroll systems. This makes it difficult to collect regular insurance contributions.
Kalada Richard, registrar/CEO of the Institute for Healthcare Finance and Management (IHFM), said the scale of the challenge is enormous.
“If we have 200 million people and only about 20 million are covered, it means 180 to 190 million people still pay out of pocket,” he said.
“That’s a huge burden on families and a huge opportunity for reform.”
Richard recommended community-based insurance models and targeted subsidies to bring informal workers into the system.
Beyond economic barriers, public skepticism about health insurance remains widespread.
Many Nigerians are unfamiliar with how insurance works or doubt that the system will deliver when they need it.
Poor service quality, delays in approvals, drug shortages, and occasional refusal of insurance cards by hospitals have further eroded trust.
Anthony Omolola, chief medical director of St Rachael Hospital Lagos, said restoring confidence is critical.
“Nigerians are not seeing value for money in health insurance yet. When people register and still cannot access quality care, they lose confidence. The NHIA must build that trust through transparency and responsiveness,” he said.
Experts warn Nigeria is far from universal coverage
Industry groups say the country remains far from achieving universal health coverage.
The Health Care Providers Association of Nigeria (HCPAN) estimates that over 90 percent of Nigerians still lack health insurance.
Abiola Paul-Ozieh, HCPAN Lagos chairman described the situation as unacceptable.
“Health insurance has been in Nigeria for over twenty years, yet over 80 percent of Nigerians are still uninsured. We cannot talk about universal health coverage if people are not brought into the system,” she said.
Paul-Ozieh urged policymakers to close the awareness gap and demonstrate stronger leadership in implementing reforms.
Policy implementation still weak
Experts also argue that the National Health Insurance Authority Act, which mandates compulsory coverage, has not been effectively enforced.
Austin Aipoh, national president of HCPAN, said implementation remains the biggest challenge.
“The Act is there, but there is no enforcement. Coverage is still abysmally low, and many Nigerians are disillusioned about the promises of health insurance,” he said.
Aipoh added that inflation and economic instability are frustrating the benefits of recent tariff adjustments for healthcare providers.
Lessons from Thailand
Healthcare economists often point to Thailand’s Universal Coverage Scheme as an example of successful health insurance reform.
Thailand expanded coverage from less than two percent of its population in 2001 to nearly 98.5 percent by 2015 by financing healthcare largely through general taxation.
The country consistently allocates 11 to 16 percent of its national budget to healthcare, significantly higher than Nigeria’s spending.
Experts say Nigeria could learn from this approach by strengthening primary healthcare and funding universal coverage through tax revenue rather than relying heavily on individual contributions.
Achieving universal health coverage in Nigeria will require sustained reforms, stronger political commitment, and significant financial investment.
Experts say key priorities should include:
- Expanding public education on health insurance
- Introducing subsidies for poor and vulnerable populations
- Strengthening primary healthcare infrastructure
- Increasing government health spending
- Improving transparency and accountability within the NHIA
Without these measures, analysts warn that Nigeria’s health insurance system may struggle to expand beyond its current limited reach.
For now, the increase in enrollment to 21.7 million Nigerians offers a glimmer of progress.
But with more than 180 million people still uninsured, the country’s journey toward universal healthcare remains long and uncertain.
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