Mandatory Health Insurance: A Crucial Key to Reducing Healthcare Spending, But Implementation is Everything – Expert Analysis

By Abujah Racheal
Abuja, Jan. 5, 2026

In a nation where a single hospital bill can plunge a family into poverty, health experts are pointing to the nationwide expansion of mandatory health insurance as a pivotal, though complex, solution. While the policy represents Nigeria’s most significant stride toward Universal Health Coverage (UHC), specialists warn that its success hinges entirely on closing critical implementation gaps in equity, trust, and service quality.

The urgency for systemic change is underscored by stark financial realities. “Nigeria consistently records one of the world’s highest rates of out-of-pocket health spending, often exceeding 70% of total health expenditure,” explains Dr. Abigail Banji, a Lagos-based health economist. “This model is economically regressive and medically dangerous. It forces families to choose between treatment and essentials like food or school fees, leading many to delay care or resort to risky self-medication until a condition becomes critical—and far more expensive to treat.”

The core principle of mandatory health insurance is risk-pooling. By collecting premiums from a large, diverse population (including the healthy and the young), funds are created to cover the needs of the sick when they arise. “It transforms healthcare financing from a catastrophic, unpredictable event into a predictable, managed cost,” Dr. Banji notes. “Households are protected from financial ruin, and the system encourages preventative and early treatment, which is ultimately cheaper and saves lives.”

Beyond Paper Coverage: The Pillars of Effective Implementation

However, experts unanimously stress that an insurance card does not equal access to care. The true test lies in the details of execution.

1. Comprehensive Benefit Packages: “Insurance is a hollow promise if the benefit package is inadequate,” states Dr. Ibrahim Amadou, a Digital Health Consultant. “Protection evaporates when patients must still buy basic drugs, pay for diagnostics, or cover ‘unofficial’ charges out-of-pocket.” He highlights that sustainable schemes must explicitly cover chronic, high-cost conditions like cancer, renal dialysis, and advanced diabetes. Without this, the financial burden merely shifts from the first hospital visit to the long-term management of illness.

2. Quality of Care and Dignity: Insurance must be coupled with service quality. Dr. Abdulrahman Musa, a Public Health Expert, reports common grievances: “Insured patients often face discrimination, delays, or demands for additional payments. Strong, independent regulation and real-time monitoring are non-negotiable to ensure facilities provide the entitled services promptly and respectfully. The goal is dignified care, not just a transaction.”

3. Robust Accountability Mechanisms: For the system to earn public trust, clear recourse pathways are essential. Mrs. Maimuna Abdullahi of the Africa Health Budget Network (AHBN) advocates for stronger consumer protection. “When services are denied or co-payments are unexplained, enrollees need accessible, efficient complaint-resolution channels. There must be transparency and consequences for non-compliance by both insurers and providers to prevent Nigerians from being cheated by the very system designed to protect them.”

The Path Forward: Integrating Lessons from Global Models

Successful UHC models, from Germany’s social health insurance to Rwanda’s community-based schemes, show that mandatory insurance requires:

• Equity in Financing: Sliding-scale contributions or government subsidies for the poor to ensure genuine universality.
• Strategic Purchasing: Insurance bodies must actively negotiate with providers for quality services at fair prices, not just act as passive bill-payers.
• Digital Infrastructure: Integrated systems for enrollment, claims processing, and monitoring to reduce fraud, delay, and administrative waste.

While the policy shift toward mandatory insurance is a foundational and necessary step for Nigeria, the experts conclude that it is not a silver bullet. Its power to reduce catastrophic spending and improve health outcomes will be directly proportional to the political will and administrative rigor applied to building a trustworthy, equitable, and high-quality healthcare delivery framework around it. The nation’s health and economic resilience depend on getting this implementation right.

(NAN) (www.nannews.ng)
AIR/AMM

Edited by Abiemwense Moru

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