Measuring the Health-Protection Gap and Actuarially Pricing Informal- Sector Health Insurance under Nigeria’s NHIA Act 2022

Abstract

Background. Nigeria’s National Health Insurance Authority Act 2022 mandates health insurance and creates a Vulnerable Group Fund, but informal-sector workers remain almost entirely uncovered. No study has priced the statutory package, tested the solvency of a pool providing it, and measured the protection it would buy. Methods. Using the General Household Survey-Panel 2018/19 (4,968 households, 25,134 individuals), we estimated catastrophic health expenditure (CHE) on the published consumption aggregate, with bounds for the annualized outpatient recall. We priced the NHIA basic package from individual cost models with induced demand and simulated pool ruin under alternative take-up, contribution schedules and reinsurance, with design-based bootstrap intervals. Results. CHE at the 10% budget-share threshold affects 14.0% of the population (4.2% to 14.0% across recall bounds) and 6.6% on capacity to pay, the only measure concentrated among the poor. Informal-sector households are more affected on both measures, and the gap survives controls. The gross premium is ₦24,413 per person-year (95% interval ₦22,636 to ₦26,707) against a contribution ceiling of ₦10,665. A 20,000-life pool needs a subsidy of ₦11,704 per enrollee under random take-up and ₦34,356 under strong adverse selection at low take-up. Graded contributions cut the subsidy by more than half; reinsurance does not reduce it. Fully subsidized coverage cuts CHE to 3.7%; a flat contribution leaves it at 9.6%. Conclusions. The statutory package costs 2.3 times what intended beneficiaries can pay. The gap is expected cost, not volatility: enrollment mechanism, contribution design and the size of the Vulnerable Group Fund decide whether coverage protects poor households.