By VictorTalksHealth
Nigeria has a national health insurance scheme that is supposed to cover every citizen. Twenty years on, 75 percent of Nigerians are still paying cash every time they see a doctor. See why and what can change in this article.
Consider a working mother in Surulere, Lagos. She holds a job. She pays tax. Her employer deducts money from her salary every month. She has never seen a doctor this year because she does not think she can afford it. Yet tucked inside her employment paperwork, largely unread, is a health insurance card that entitles her to walk into a clinic and be seen—for free, or nearly free. She does not use it. She does not know exactly what it covers. The last time she tried, the hospital sent her to a different queue and eventually told her a drug she needed was “not on the list.” She paid out of pocket and has not tried again.
This story, with variations, is the story of health insurance in Nigeria. The scheme exists. The law mandates it. The infrastructure, however imperfect, is in place. And yet 75 percent of Nigerians—over 180 million people—continue to pay for healthcare entirely from their own pockets, exposing themselves to the devastating financial shocks that come with illness: selling assets, borrowing money, or simply not seeking care until a condition has become critical.
What is health insurance, in the simplest possible terms?
Health insurance is a system where many people put money into a common pot regularly—before they are sick. When any one of them needs medical care, the pot pays for it. This means nobody has to carry the full cost of illness alone, and nobody goes bankrupt because of a hospital bill.
Think of it like a cooperative. In a farming cooperative, members contribute a small amount each month so that when one member loses a crop to flooding, the cooperative helps them recover. Health insurance is the same idea: your regular small contribution helps you and others, so nobody faces a medical crisis alone with empty pockets.
In Nigeria, the body in charge of health insurance is the NHIA—the National Health Insurance Authority. It oversees the scheme at a national level. The companies that actually manage your enrolment and pay hospitals on your behalf are called HMOs—Health Management Organisations. You deal with your HMO day-to-day.
What NHIA is and what it is supposed to do
The National Health Insurance Authority, known as NHIA (and previously NHIS—the National Health Insurance Scheme), was established to give every Nigerian access to basic healthcare without facing financial ruin every time they fall ill.
The idea is simple: instead of each person paying the full cost of a hospital visit, doctor, or drug out of their own pocket at the worst possible moment — when they are sick — everyone contributes a smaller amount regularly (through their employer, the government, or directly), and that pool of money pays for everyone’s care when needed. This is how health insurance works everywhere in the world.
Nigeria launched the scheme in 2005. In 2022, a new law—the National Health Insurance Authority Act—replaced the old structure with a stronger, broader agency with powers to regulate, sanction, and expand coverage.
The 2022 Act also, for the first time, made health insurance compulsory for all Nigerians—not optional. It established new funds specifically for poor and vulnerable Nigerians who cannot afford premiums, including a Vulnerable Group Fund aimed at covering approximately 83 million of the most deprived citizens.
By July 2025, the NHIA Director-General announced that 22.03 million Nigerians were enrolled in health insurance—a 35 percent year-on-year increase from the 16.7 million baseline in 2024. This is genuine progress. But it also means that roughly 190 million Nigerians — almost 90 percent of the population — remain uncovered. In a country of over 200 million people, 22 million enrolled is still a crisis.
How NHIA works — The basics
NHIA is a Nigeria’s national health insurance body, created to give every Nigerian access to healthcare without paying everything upfront at the hospital
It operates through Health Management Organisations (HMOs)—private companies that collect contributions and manage access to care on behalf of enrollees.
Employers are required by law to enroll their workers. The premium is shared: the employer pays a larger share, and the employee pays a smaller contribution from salary.
When an enrollee needs care, they go to a registered clinic or hospital on their HMO’s list and show their insurance card. The HMO pays the clinic, not the patient.
The Basic Health Care Provision Fund (BHCPF) provides free or subsidized care to poor Nigerians through primary health care centers, funded by a percentage of the consolidated revenue fund.
Since 2022, the scheme is legally mandatory for all Nigerians—not just federal civil servants. Enforcement is still catching up.
All 36 states and the FCT now have operational state health insurance agencies running their own parallel schemes alongside the federal program
Why most Nigerians are not using cover they are entitled to
The reasons for the persistent gap between what the scheme promises and what Nigerians experience are well documented by researchers, journalists, and the NHIA itself. They divided it into three broad categories: structural problems, HMO problems, and awareness and trust problems.
On the structural side, the most significant issue is the exclusion of the informal sector. The NHIA scheme in its original form was designed around formal employment: your employer enrolls you and deducts your contribution from your salary. But the majority of Nigerians do not have formal employment. They are traders, artisans, farmers, mechanics, market women, okada riders, and domestic workers.
For this majority, there is no employer to deduct contributions, no automatic pathway into the scheme, and no simple mechanism for independent enrolment and payment. The 2022 Act created frameworks to address this through the Vulnerable Group Fund and informal sector provisions, but implementation is still far from matching the scale of the need.
Nigeria also spends far too little on health. In the 2025 budget, the government allocated ₢2.48 trillion to the health sector—just 4.33 percent of the total national budget, well below the 15 percent target Nigeria committed to in the 2001 Abuja Declaration. Without adequate government funding, the scheme cannot deliver the quality of care that would make enrollment attractive. The money simply is not there to pay hospitals and clinics enough to motivate them to serve insured patients well.
The HMO problem: When insurance does not work the way it should
For the millions of Nigerians who are technically enrolled—primarily formal sector workers—the experience of using health insurance has often been deeply frustrating. Guardian Nigeria and Al Jazeera investigations, as well as the NHIA’s own internal acknowledgements, reveal a recurring pattern of problems at the HMO level.
Hospitals complain that HMOs owe them millions in unpaid claims. When HMOs do not pay, hospitals retaliate by placing insured patients on separate, slower queues, or by quietly refusing to see HMO patients during busy periods, or by telling enrollees that certain drugs and procedures are “not on the list” — meaning the patient must pay anyway, defeating the entire purpose of insurance.
Enrollees frequently report waiting hours for treatment authorization codes—a system by which the HMO must approve care before it can be given. In genuine emergencies, this delay can be dangerous. The NHIA in 2024–2025 introduced a one-hour deadline for authorization codes as a reform measure, but compliance remains inconsistent. Many enrollees also report that they do not fully understand what their plan actually covers. Is antenatal care included? What about physiotherapy? Specialist referrals? Eye care? The answer is often: it depends on your HMO and your specific plan, but nobody explained this clearly when you enrolled.
The most common complaints from NHIA/HMO enrollees
1) Being placed in a separate, slower queue at the hospital or being turned away because the HMO owes the hospital money.
2)Drugs or tests being declared “not on the HMO list” and having to pay out-of-pocket despite being enrolled.
3) Long waits for treatment authorization codes, sometimes hours, even for urgent care.
4) Not knowing exactly what their plan covers—enrollees finding out mid-treatment that a service requires extra payment.
5) Having to pay “top-up” fees at certain hospitals even when showing a valid insurance card.
6) Poor quality of care at accredited facilities, with staff treating insured patients worse than private-paying patients.
7) HMO customer service that is difficult to reach or unhelpful when problems arise.
8) Not being told which hospitals and clinics are in their HMO network, leading to wasted journeys
The Awareness Gap: Not knowing what you are entitled to
Beyond the structural and operational problems, there is a foundational awareness crisis. A NOI Polls survey found that health insurance remains practically invisible to most Nigerians despite existing for two decades. Many Nigerians in the informal sector do not know that schemes exist for them. Many formal sector workers who are enrolled do not know what their insurance coverage, which hospitals they can use, how to make a complaint if care is denied, or that they have any rights at all as an enrollee.
Among young Nigerians, health insurance is frequently absent from financial planning conversations. Savings for emergencies, investment platforms, and cryptocurrency get more attention than health cover. Yet a single hospitalization without insurance can wipe out months of savings. Medical bills are consistently cited by development economists as one of the leading causes of household financial collapse in Nigeria.
A 2025 BMC Health Services Research study analyzing the determinants of health insurance uptake in Nigeria found that education level was one of the strongest predictors of enrollment. People with higher education were significantly more likely to have insurance. This means the awareness gap is sharpest precisely among those who are already most economically vulnerable.
What is actually changing: Reforms worth knowing about
The picture is not entirely bleak. Since the 2022 NHIA Act, several genuine reforms have taken shape. The NHIA has sanctioned non-compliant HMOs, revised tariffs to make it more financially viable for hospitals to serve insured patients, and implemented the one-hour authorization code rule.
The Basic Health Care Provision Fund—which provides free care at primary health care centers for the poorest Nigerians—now supports 2.67 million beneficiaries, with 800,000 newly enrolled in 2025 alone.
State-level health insurance schemes are now accounting for 50 percent of total national health insurance enrollment, a significant shift from the exclusively federal focus of the old NHIS. Lagos, Kwara, Ogun, Ekiti, Enugu, and Ondo states have some of the most active state health insurance agencies.
These state schemes can sometimes be accessed independently of the federal program and offer coverage to informal sector workers through community-based or household enrollment models.
The NHIA has also piloted integration of donor-funded programs into insurance coverage, including for people living with HIV and tuberculosis patients—historically excluded populations who now have access to covered care in five pilot states. A Fistula-Free Initiative has delivered obstetric care to over 7,500 women. These are meaningful developments even against the backdrop of a still deeply inadequate overall system.
What every Nigerian should do right now
If you are a formal sector worker, ask your HR department or employer today whether you are enrolled in a health insurance scheme and which HMO covers you. Get the name of the HMO, the phone number or app, and a list of accredited hospitals near you. If your employer has not enrolled you, this is a legal requirement under the NHIA Act, and you can report non-compliance to the NHIA.
If you are an informal sector worker—a trader, artisan, self-employed professional, or farmer—contact your State Health Insurance Agency (sometimes called SSHIA) to ask about community-based or household enrollment options in your state. Several states have specific plans for informal sector workers at subsidized rates. The NHIA website (www.nhia.gov.ng) and its helpline are starting points for identifying what is available in your area.
If you are poor and cannot afford any premium, the Basic Health Care Provision Fund is meant to cover you for free care at accredited primary health care centers. Ask at your nearest PHC whether they are registered with the BHCPF and how to access free services under it.
Conclusion
Nigeria has a health insurance system. It is imperfect. It is underfunded. It has HMOs that sometimes behave badly and hospitals that sometimes push insured patients away. But it also has real benefits, real protections, and real reforms underway that are making it better year by year.
The biggest problem right now is not that the scheme does not exist. It is that most Nigerians do not know what they are entitled to, do not know how to use what they have, and have been burned enough times to stop trying. That is an awareness problem. And awareness problems can be fixed.
Know your rights. Know your HMO. Know your nearest accredited hospital. Know the BHCPF exists. Tell the people in your life that health insurance is not something that only happens to other people. It is yours to claim.
Victor Aniogbu (Victor TalksHealth) is a Human Anatomist and Wellness Advocate.
He wrote in from Owerri.
For feedback, email– victortalkshealth11@gmail.com
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