Does expanding health insurance in rural Nigeria result in improved health outcomes and poverty reduction?

Abstract

The recent surge in enrolment in Nigeria’s National Health Insurance Scheme (NHIS) of 11% in Q4 of 2023 presents a critical opportunity to assess its potential for improving healthcare outcomes and reducing poverty, particularly in rural areas. Given the significant healthcare infrastructure and personnel disparities across Nigeria’s rural regions, this paper investigates whether health insurance can effectively achieve these goals. We stress the importance of workforce development in this context. Despite the theoretical advantages of health insurance in enhancing access to care and alleviating financial burdens, its impact in rural areas is severely constrained by a lack of healthcare professionals and facilities. These systemic deficits limit access to quality care, undermining the potential benefits of expanded insurance coverage. We argue that while expanding health insurance is essential, it is insufficient to generate substantial improvements in health outcomes or meaningful poverty reduction without concurrent investments in healthcare infrastructure and workforce development. Furthermore, we propose a phased strategy that prioritizes strengthening healthcare facilities and increasing the availability of healthcare professionals in rural areas, followed by broader insurance coverage expansion. This approach ensures that the gains from health insurance translate into real improvements in healthcare access, outcomes, and long-term poverty reduction, thereby enhancing services for underserved populations.