Lagos Eyes N400bn Insurance Premiums To Boost Healthcare Financing

Lagos State Commissioner for Health, Prof. Akin Abayomi, has said that Lagos could channel more than N400 billion each year into its healthcare system if 20 million residents sign up for insurance at an average premium of N20,000 annually.

The projection underscored the State government’s push to expand coverage and strengthen health financing in Africa’s most populous city, even so, as it unveiled the Lagos Private Health Partnership (LPHP), a reform initiative designed to restructure health financing, expand insurance coverage, and make quality healthcare more accessible to residents.

The new scheme, launched at Victoria Island, brings top government officials, healthcare regulators, private insurers, development partners, and financial institutions, who affirmed shared commitment to sustainable health financing and universal health coverage (UHC).

Officials said the LPHP will help more Lagosians enroll in health insurance while ensuring hospitals receive fair funding to deliver better services.

Delivering the keynote address on behalf of the Lagos State governor, Mr Babajide Sanwo-Olu, the Secretary to the State Government (SSG), Barr. Abimbola Salu-Hundeyin, described the LPHP as a historic step towards building a resilient and future-driven health financing architecture capable of protecting households from catastrophic expenditure.

She noted that the initiative demonstrated Lagos’ seriousness in translating compulsory health insurance mandates into effective, scalable, and economically viable implementation.

According to the governor, the LPHP emerged directly from Lagos’ domestication of the National Health Insurance Authority (NHIA) Act of 2022 through an Executive Order signed in July 2024, making health insurance mandatory for all residents and establishing enforcement mechanisms for compliance. He said the state set up a multi-stakeholder Technical Working Group whose recommendation led to the creation of operational guidelines and the LPHP to align private sector participation with policy direction, risk pooling, and digital accountability.

He added that the reform is expected to strengthen private health service delivery responsible for over 70 per cent of healthcare encounters in Lagos, while enabling insurers and providers to operate within a clearly defined framework that balances profitability, service standards, and equity.

The governor further announced that the state has adopted a population-based enrolments model for employees of private organisations to streamline risk distribution and subsidised plan access.

State Commissioner for Health, Prof. Akin Abayomi, in his opening remark, said the launch signals a decisive break from a decade-long fragmented and inefficient private health insurance marketplace characterised by unhealthy price undercutting, unpopular enrollee access restrictions, and loss of trust among stakeholders.
He said the LPHP was purposely engineered to restore fairness, transparency, quality, and sustainability through a collaborative procurement platform.

Abayomi lamented that despite Lagos’ economic strength and a population exceeding 25 million, the state continues to suffer from inadequate health financing, low insurance penetration, workforce attrition, and increasing medical tourism.

He stated that the LPHP is government’s strongest tool yet for reversing the trend, improving health outcome indicators, and recalibrating patient confidence in domestic healthcare capacity.

Abayomi disclosed that the LPHP is underpinned by a robust digital marketplace where enrolment, provider selection, fund flow, claims management, monitoring, reporting, and evaluation will occur seamlessly with compliance footprints. Through the system, he said, competition will shift from price-driven rivalry to value-driven outcomes, standardised plans, and quality assurance enforced by HEFAMAA.

The Commissioner reiterated that full enforcement of mandatory health insurance will commence after a six-month sensitisation window, aligning with Mr. Governor’s directive to scale risk-pooling, cross-subsidisation, and financial protection. He emphasised that without widespread enrolment, Lagos cannot actualise a functional insurance ecosystem capable of delivering equitable, people-centred care.
In his technical presentation, Prof. Abayomi further outlined that LPHP will introduce a state-managed risk equalisation and solidarity fund, requiring private insurers to contribute 13 percent of premiums to protect vulnerable populations, strengthen emergency response, and sustain universal health coverage commitments.
He projected that Lagos could inject over N400 billion annually into the healthcare financing system if 20 million residents enrol at an average premium of N20,000 yearly.

Chairman, Lagos State Health Management Agency (LASHMA), Dr. Adebayo Adedewe, in a goodwill message, said LPHP is a credible solution to long-standing challenges in the health insurance space and commended government’s thorough stakeholder engagement and technical design process. He pledged agency alignment and described the launch as a “watershed moment” for the evolution of health financing in Lagos.

National Adviser on Health Insurance Matters for the Healthcare Providers Association of Nigeria (HCPAN), Dr. Jimi Arigbabuwo, described the launch as a turning point in the recognition and integration of private sector providers who deliver the majority of Nigeria’s healthcare services. He urged government to prioritise fair compensation for providers to guarantee sustainability, patient satisfaction, and reduction in outbound medical tourism.