Out-of-pocket medical bills derail health insurance reforms

During one of her routine visit to the optometrists in October 2025 at the Federal Medical Centre, Umuahia, Beatrice Eze was told she might lose her sight, and needed surgery.

The farmer and petty trader from Ihie was diagnosed with advanced cataract. The operation, medication and consultations cost nearly N500,000.

Without health insurance or any form of financial protection, Eze said she used her business capital and relied on loans and support from family and friends to pay the bill.

“I used my business money and suspended my business for weeks. If I didn’t do the surgery, I could lose my sight,” she said.

Her experience reflects a broader reality across Nigeria, where out-of-pocket medical bills, rising drug prices, surgical costs and weak insurance coverage are pushing millions of households into financial strain and poverty.

In Abuja, 21-year-old security guard Dennis Nanzem said he nearly lost his life in 2025 after he was unable to afford diagnostic tests prescribed at a hospital.

He said he initially experienced malaria-like symptoms, including fever and body pains. At the hospital, he was asked to undergo a series of tests, including scans and an X-ray, estimated at about N80,000, far beyond his means.

“I didn’t have the money, so I bought medicines from a chemist, which helped relieve the pain and symptoms. But after some days, while at work, I collapsed and was rushed to the hospital.

“I was later diagnosed with severe pneumonia and malaria. It was my colleagues and some relatives who helped me settle the bill,” he said.

Nigeria’s rising cost of medicines and treatment is colliding with weak financial protection for patients. It is also making them spend the bulk of their meagre salary on expensive healthcare ignoring other vital human needs like food and shelter.

Data from the National Bureau of Statistics show health inflation rose to 28.62 percent in February 2026, up from 19.58 percent in February 2025, on a year-on-year basis, reflecting persistent pressure on household finances and rising costs of medical care across the country.

However, nearly four years after the enactment of the National Health Insurance Authority (NHIA) Act, coverage still hovers below 10 percent of the population, leaving more than 200 million people exposed to out-of-pocket medical spending that can push households into poverty.

The 2022 NHIA Act which was enacted after nearly two decades of stagnation under the previous 2004 law, made health insurance mandatory for all Nigerians and legal residents. It strengthened regulatory oversight and created funding pathways for vulnerable groups, with government identifying about 80 million Nigerians in that category.

According to NHIA data, total coverage stood at 21,101,156 as of the third quarter of 2025, a slow pace compared to a population estimated at more than 220 million.

“At this pace, the country will struggle to reach even a quarter of its population by 2030, the year Nigeria has set to achieve universal health coverage,” said Adaobi Onyechi, a public health expert.

“The reform law has legal strength, but coverage expansion is not keeping pace with population growth or rising healthcare costs. This means millions remain one illness away from poverty,” she added.

The data also showed that coverage remain limited and heavily skewed toward the formal sector.

Of the 21.1 million covered, 4,643,499 are in the organised public sector, including 3,655,756 state and local government employees. The informal sector accounts for just 1,333,498 enrollees. 2,495,094 beneficiaries are covered under the Basic Health Care Provision Fund, while 3,767,722 are enrolled through the equity fund targeting vulnerable populations.

This leaves the vast majority of Nigerians, particularly informal workers and vulnerable groups, outside the insurance net.

By comparison, countries such as Indonesia have leveraged similar reforms and achieved coverage of about 98 percent of its population of more than 280 million.

Findings show that despite the reform, Nigeria’s health insurance system continues to face old challenges, including a large informal sector without structured payroll systems, weak enforcement of mandatory provisions, mistrust of the system, rising healthcare costs, fragmented risk pools, inadequate funding for vulnerable groups and uneven implementation across states.

An NHIA official, who requested anonymity, said one of the biggest obstacles is integrating the informal sector, which lacks structured payroll systems and often resists premium payments.
“Many people in the informal economy are not ready to pay premiums due to affordability constraints or personal and religious beliefs,” the official said.

Efforts to enforce compliance, including proposals to link insurance to access to services such as travel documentation or banking, have also stalled.

The limited reach of the scheme persists as cost of care continues to climb. For instance, the cost of a caesarean section has risen sharply in recent years, with prices in 2025–2026 roughly 400 percent to 500 percent higher than in 2020. While a C-section in a public hospital once cost about N50,000 to N100,000, the procedure now ranges from about N200,000 to over N500,000 in public facilities, with private hospitals charging well above N1 million.

The cost of malaria treatment has also surged, with common antimalarial drugs rising by more than 100 percent to 150 percent . A dose that cost between N1,300 and N3,500 in 2022 now sells for as much as N9,000, while widely used brands such as Lonart have climbed from about N3,600 to over N8,000.

Kelechi Ohiri, director-general of the NHIA, had warned of the emergence of “health-poor” Nigerians, people who earn income but are pushed into poverty by medical expenses.

He said out-of-pocket spending still dominates health financing in Nigeria, driven by fragmented risk pools, outdated tariffs, inadequate reimbursement rates and rising costs.

Experts say stronger enforcement of the mandatory framework, alongside subsidies and digital enrolment systems, is critical to expanding coverage.

They point to countries such as Ghana and Indonesia, which have significantly expanded insurance coverage through strict enforcement and sustained public financing.

Nigeria has set a target of enrolling 50 million people by 2030, but experts say the current pace makes the goal increasingly difficult to achieve.

Onyechi said without stronger enforcement, expanded subsidies for low-income households, improved state-level implementation and better reimbursement for healthcare providers, uptake will remain slow.

Vahyala Kwaga, deputy country director at BudgIT, stressed that health insurance remains one of the most effective ways to ensure Nigerians can access affordable and quality healthcare, while protecting households from sudden increases in medical costs.