Understanding Health Insurance in Nigeria: A Beginner’s Guide

Today, let’s discuss the beginner’s guide on understanding health insurance in Nigeria.

This kind of insurance plays a vital role in healthcare access and financing in any country. In Nigeria, health insurance uptake remains low with less than 5% of the population covered.

However, there is increasing interest in health insurance as more people seek financial risk protection and improved access to quality healthcare.

health insurance in nigeria

This article provides a beginner’s guide to health insurance in Nigeria, explaining the key concepts, players, plans, and challenges.


Health insurance is a system that helps pay for medical expenses and spreads the financial risk associated with illness or injury across a pool of individuals. Under a health insurance plan, members pay a regular premium to the insurance company, which then covers all or a portion of their medical costs when they fall sick or get injured.


The key players in Nigeria’s health insurance space include:

  • National Health Insurance Scheme (NHIS): A government agency that oversees and regulates health insurance across Nigeria. It sets standards and guidelines for health insurance plans.
  • Health Maintenance Organizations (HMOs): These are private health insurance companies that offer health plans and facilitate access to care from healthcare providers they have agreements with.
  • Public and private healthcare providers: These include hospitals, clinics, pharmacies, diagnostic centers, etc. Insured members can access care from. Providers need accreditation from NHIS to offer services under health plans.
  • Employers: Many health plans cover employees of public organizations, private companies, etc. The employer pays all or a percentage of the premium.


The major health insurance options in Nigeria include:

  • Employer-Based Plans: Companies provide health coverage for employees as a work benefit. Premiums may be employer-funded, shared, or employee-funded.
  • Private Individual/Family Plans: These are plans individuals buy directly from insurance companies to cover themselves and their families. Premiums are paid by the individual.
  • Government Health Insurance: Including plans like the Formal Sector Social Health Insurance Program of the NHIS that covers federal government employees and private-sector workers.
  • Community-Based Health Insurance (CBHI): Members of rural communities, trade groups etc pool funds to provide basic health coverage for members. It is more affordable but limited in scope compared to typical insurance plans.


Standard health insurance plans in Nigeria cover the following:

  • Doctor visits and specialist care
  • Hospitalization
  • Surgeries
  • Lab tests and scans
  • Maternity care
  • Emergency care
  • Generic drugs
  • Mental health care (on some plans)

However, coverage can vary significantly across different health plans based on the type of plan, insurer, amount of premiums paid etc. Many basic plans only cover inpatient care and major surgeries while excluding routine care, dental services and brand name drugs. It is important to read plan coverage details before signing up.


A lot of people do ask what’s the advantages of health insurance in the country. Let’s highlight them below. Here are the major advantages of having health insurance in Nigeria explained:

  • Financial protection from high healthcare costs: Health insurance shields insured individuals from bearing the full brunt of medical bills in cases of illness, accidents or hospitalization. It drastically reduces out-of-pocket spending.
  • Improved access to quality healthcare: Health insurance plans empower people to access higher levels of care like specialist services, expensive diagnostics and branded drugs which they often cannot afford out-of-pocket especially in private facilities.
  • Focus funds on preventive care: By providing funds for regular doctor visits, tests, checkups and medications as part of coverage, health insurance enables the prevention and early detection of diseases. This is cheaper than paying for complicated late-stage treatments.
  • Peace of mind and emotional wellbeing: The assurance that medical bills will be taken care of in the event of unforeseen health crises helps relieve anxiety for entire households, supporting mental health.
  • Increased productivity: A healthy workforce is a productive workforce. Employer-sponsored health plans that keep employees healthy mean higher productivity, business revenue and economic gains.
  • Safeguard family finances: Families with health cover do not risk sinking lifetime earnings, assets, investments or children’s education funds into medical emergencies that can instantly impoverish them. Their financial plans stay intact.

With health insurance plans now more accessible and affordable in Nigeria, tapping into these benefits can secure health and wealth for families and the entire nation.


While health insurance aids healthcare access and financing in Nigeria, some key challenges plague the sector:

  • Low Awareness and Misconceptions: Many Nigerians are not well informed about health insurance concepts and believe it is expensive or limited to government employees only. This impacts enrollment rates.
  • Out-of-Pocket Payments: Copays, deductibles and items not covered by a plan leads to high out-of-pocket spending at point of care, affecting utilization.
  • Inadequate Regulation: Occasional reports about insurers failing to pay claims impacts confidence in the system and must be better addressed.
  • Limited Risk Pool: The pool of actively insured individuals is still too low to effectively spread risk and costs. A larger risk pool will lower premiums and increase plan choice.
  • Healthcare Access Gaps: With few accredited facilities in rural areas, the impact of health insurance on access remains limited for many poorer communities.


That’s the size of this article on health insurance in Nigeria. But before we conclude, here are some key takeaways regarding the health insurance in the country.

Health insurance facilitates affordable quality healthcare access which is essential for development. While the sector faces obstacles, the Nigerian government is taking regulatory and strategic measures to deepen penetration.

With greater awareness, enforcement of standards, expanded accredited facilities, and innovative health financing policies, the true benefits of health insurance may be unlocked for Nigerians.

I hope you have learnt a lot from this beginner’s guide on how you can understand health insurance in Nigeria. If you have any questions regarding this, you can drop them in the comments section below.

Mfonobong Daniel

I am Daniel, a professional financial blogger, an insurance agent and financial adviser. Join me as I unravel and breakdown the mysteries behind insurance policies in Nigeria.

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