23 million insured, 200 million not: Nigeria's health insurance market after the NHIA Act

Published 25 October 2026 · 7 min read · By Moyo Awoyokun, MB ChB, MBA, FIHIMCN

In brief

Nigeria's National Health Insurance Authority reported more than 23 million people enrolled in September 2026, up from 16.2 million at the end of 2023. The NHIA Act 2022 made cover mandatory, the regulator has started to enforce it, and premiums have been repriced after the first tariff review in over a decade. Yet coverage remains under ten per cent of a population above 220 million, and two thirds of all private HMO enrolment sits in just two cities. For HMO executives the question is where the next ten million members come from. For investors it is whether the operators who serve them can do so at a margin.

The numbers have moved

Three figures describe the market today.

Enrolment. The NHIA's Q4 2025 release counted 21,737,130 enrollees across the 36 states and the FCT, spanning thirteen programmes. By Q1 2026 the figure was 22,025,342, a 35 per cent rise on the 16.2 million recorded in Q4 2023. In September 2026 the Director-General, Dr Kelechi Ohiri, put it above 23 million.

Composition. Of the Q4 2025 total, state social health insurance agencies accounted for 9.74 million, the federal formal sector for 4.23 million, and private HMO plans for roughly 2.17 million. The remainder sits in the Basic Health Care Provision Fund, GIFSHIP, TISHIP and the smaller programmes.

Price. In April 2025 the NHIA implemented its first tariff review in over a decade: capitation up 93 per cent and fee-for-service up 378 per cent against December 2023 rates. Private HMO premiums followed. Premiums rose by between 8 per cent on basic tiers and 59 per cent at the top from 2024 to 2025.

Growth is real, but it is narrow

The headline growth hides three structural limits.

Coverage is still under ten per cent. More than 220 million people live in Nigeria. Twenty-three million enrolled leaves roughly 200 million without cover. Out-of-pocket spending is 71.9 per cent of current health expenditure, among the highest in the world.

Growth is coming from the public purse, not the private market. State schemes and the federal formal sector together make up two thirds of enrolment. The BHCPF has supported about 2.7 million poor and vulnerable Nigerians. Private HMO plans are a tenth of the total.

Private cover is concentrated where salaries are. Lagos holds about 1.18 million private HMO enrollees and the FCT about 223,000. Between them that is roughly 1.4 million of the 2.17 million national total, or two thirds. In Delta, the state with the largest overall coverage at 2.92 million, private HMO enrolment is 27,204. In Imo it is 6,255. In Jigawa it is 5,952. Outside Lagos and Abuja the private market has barely started.

A fourth limit sits on the cost side. About 93 per cent of employed Nigerians work informally. They have no payroll through which a premium can be deducted, and they are the people the NHIA Act's mandate now reaches. Serving them means collecting small, irregular premiums and paying claims at tariffs that have just nearly doubled.

So where is the opportunity?

If enrolment is growing but the private market is small, urban and newly expensive, where is the opportunity, and what does an operator need to capture it?

The opportunity is operational, not just distributional

The usual reading of the Nigerian market is a distribution story: 200 million uninsured, so sell more policies. That reading is incomplete. The constraint on growth is not demand. It is whether an HMO can enrol, authorise, pay and collect at a cost that leaves a margin once capitation is 93 per cent higher than it was.

Four things follow.

1. The informal sector is the growth market, and it is a different business. Group enrolment through cooperatives, associations and employers converts social structures into underwriting units. GIFSHIP exists for exactly this. The HMOs that grow will be the ones that can onboard a 300-member trade association in a day, collect monthly by mobile money and keep administrative cost per member low enough to make a ₦40,000 annual premium work.

2. Loss ratio discipline is now the whole game. Well-managed Nigerian HMOs target a medical loss ratio of 70 to 80 per cent. After the tariff review, holding that band requires provider-level price visibility, real-time pre-authorisation and fraud detection that works across the book rather than claim by claim. An HMO that cannot see which providers are drifting out of band will discover the drift in its annual accounts.

3. The regulator is now an operating constraint. The NHIA's one-hour rule requires treatment authorisation requests to be approved or queried within sixty minutes, and emergencies to be treated without waiting for a code. It has resolved 3,878 complaints, refunded more than ₦14.2 million to enrollees, issued 368 warning letters and suspended nine facilities. Compliance is no longer a paperwork exercise. It is a service-level requirement that manual authorisation desks cannot meet at scale.

4. For investors, the thesis is picks and shovels. The Nigerian HMO market has 83 accredited operators, most of them small. African insurtech as a whole has attracted about $262 million across 86 funded companies, and a dedicated vehicle, 3IF Ventures, reached a $12 million first close in June 2026 with FSD Africa and ZEP-RE as anchors. The value in a market of many sub-scale payers facing the same cost shock lies in the infrastructure they share: enrolment, claims, authorisation and provider pricing done once and licensed many times.

What to watch

• NHIA quarterly releases. The next two will show whether the 2027 HIV and TB coverage expansion, with more than 2,000 facilities being accredited for it, changes the programme mix.
• The BHCPF allocation. A Senate amendment to raise it from one to two per cent of the Consolidated Revenue Fund is pending in the lower chamber. If it passes, subsidised enrolment accelerates.
• Private HMO share outside Lagos and Abuja. This is the cleanest measure of whether the private market is broadening.
• Premium movement in 2027. A second year of double-digit increases would test affordability in the informal segment the Act is meant to reach.

For the mechanics behind these numbers, from risk pooling to the medical loss ratio, see the white paper Principles of risk management and insurance in health.

Frequently asked questions

How many Nigerians have health insurance?

The NHIA reported more than 23 million enrollees in September 2026, up from 21.7 million at the end of 2025 and 16.2 million at the end of 2023. That is under ten per cent of a population above 220 million.

Is health insurance mandatory in Nigeria?

Yes. The National Health Insurance Authority Act 2022 made health insurance mandatory for all Nigerians and legal residents. Enforcement began in earnest in 2024 and 2025, with federal ministries and agencies directed to enrol their employees.

What share of Nigerian health insurance is private?

About a tenth. Of 21.7 million enrollees at the end of 2025, roughly 2.17 million held private HMO plans, and about two thirds of those were in Lagos and the FCT.

Why did HMO premiums rise so much in 2025?

The NHIA raised provider payment rates in April 2025, with capitation up 93 per cent and fee-for-service up 378 per cent, after more than a decade without change. HMOs passed much of that through, with premium increases of 8 to 59 per cent depending on tier.

Data note and sources

State and programme figures are the NHIA's Q4 2025 release as reported in the press. Shares in the tracker are computed from those figures. Population denominators are deliberately excluded; the tracker shows composition, not penetration. Check figures against the NHIA's own release before citing.

1. NHIA, Q4 2025 health insurance coverage data, as reported by Nairametrics, 2 July 2026, and BudgIT, "Health insurance in Nigeria: progress, gaps and the path to universal coverage".
2. The Guardian (Nigeria), "Health insurance: how NHIA is serving and protecting Nigerians", August 2026.
3. The Guardian (Nigeria), "NHIA enrolment hits 23m as cancer, HIV/TB coverage expands", 20 September 2026.
4. Vanguard, "NHIA raises capitation fees by 93%", February 2025.
5. Nairametrics, "Rising drug prices force sharp increases in health insurance premiums across Nigeria", 14 November 2025.
6. Nigeria Health Watch, "Nigeria's state health insurance schemes are expanding. Enrolment must now lead to care", 6 August 2026, citing World Bank and NLFS Q2 2024.
7. Nairametrics, "Top 10 HMOs for buying health insurance in Nigeria in 2025", November 2025.
8. Tracxn, "InsurTech sector in Africa", August 2026; Africa Private Equity News, "3IF Ventures invests in African insurtech Turaco", 23 September 2026.