Understanding Health Insurance: What Nigerians and Hospitals Should Know

A social media post about Health Maintenance Organisations (HMOs) has caused a stir among Nigerians and health workers regarding health insurance.

The post, made on X on 2 August by user @106_36_52, who claims to be a doctor, took aim at a family that visited a hospital for medical checks under their HMO plan after church.

“I give the federal government 24 hours to ban this thing called HMO in Nigeria. Full family, straight from church with matching Ankara. Third set only today. God abeg,” he wrote.

As of 12 August, the post had over 1.9 million views and was shared by various blogs, sparking reactions from Nigerians and health professionals.

Some Nigerians questioned why healthcare providers should worry about how often insured patients use their health plans. Others felt that the reactions ignored the financial and administrative challenges faced by healthcare providers and HMOs.

In this article, we look at how health insurance works in Nigeria, the roles of patients, healthcare providers, and HMOs, and what the law says about their responsibilities.

How health insurance works

One big misunderstanding from the debate is the belief that HMO patients get free treatment.

Patients might not pay the hospital directly at the time of service, but this does not mean the treatment is free or that providers work for free.

Health insurance relies on pooling money to cover healthcare costs when members need it. The National Health Insurance Authority (NHIA) describes social health insurance as a system where contributions are pooled to provide specific healthcare services.

Pelumi Akinboade, a senior insurance officer, explained that HMOs handle important tasks like enrolment, claims management, authorisation, quality assurance, and communication between enrollees and healthcare providers.

He noted that providers are paid through methods like capitation and fee-for-service, depending on the type of care given.

“Patients may not bear the bulk of their care costs out of pocket, as their respective insurance companies pay their healthcare providers directly through capitation and fee-for-service,” Mr Akinboade told PREMIUM TIMES.

Using an insurance plan does not mean asking a doctor for free treatment. Patients are accessing a service financed through an insurance system.

Doctors’ frustration

The viral post shows another side of the story. It is easy to see a doctor's complaint as being against HMO patients.

Healthcare providers rely on HMOs to pay for services they have already given. Issues with payments and authorisations can affect how facilities offer care.

Mr Akinboade pointed out that delays in payments, administrative issues, limited coverage, and disputes between providers and HMOs can cause delays or denials of care.

The NHIA Act 2022 sets penalties for failing to pay healthcare providers on time and for not settling claims within the required timeframe.

The federal government has also acknowledged the financial pressure on healthcare providers. In announcing new payment rates under the national health insurance scheme, the NHIA said capitation fees increased by over 90 percent, while fee-for-service payments rose by 378 percent.

The Coordinating Minister of Health and Social Welfare, Muhammad Pate, said these changes aim to ease the financial burden on healthcare providers and improve services for enrollees.

While a patient’s use of their insurance should not always be blamed for a provider’s issues, we cannot ignore the financial concerns of healthcare facilities.

The law, dispute

Section 47 of the NHIA Act 2022 states that disputes under the Act should first go to the Authority for mediation and conciliation. The Act names HMOs, healthcare providers, contributors, and the Authority as parties in such disputes.

Section 48 makes it an offence to fail to pay healthcare providers on time or to settle claims within the specified period, or to deny care to a registered enrollee.

These laws show that there can be disputes over payments and access to care within the health insurance system. The tension online between patients, healthcare providers, and HMOs is not just about patients “overusing” their insurance.

It also questions whether each party is meeting their obligations.

Enrollees are expected to know their health plans and follow the procedures, but healthcare providers and HMOs also have responsibilities under the law.

Insured patients still have rights.

Mr Akinboade said healthcare providers need to recognize this. Hospitals should have trained staff who understand health insurance and can guide patients well.

He disagreed with the idea that insured patients should receive less quality care since they do not pay directly at the time of treatment.

“Insurance patients are not secondary patients. They own the right to quality healthcare services,” he said.

This view aligns with the NHIA’s statement on enrollee rights. The Authority insists that Nigerians covered under its plans have the right to access quality healthcare easily and to be treated with respect.

This distinction matters in Nigeria, where many people do not have health insurance and households pay much of their healthcare costs themselves.

A 2025 Nigeria Health Systems and Services Profile published by the African Health Observatory Platform, with the help of the World Health Organisation, found that out-of-pocket spending made up over 75 percent of total health spending, and only about five percent of Nigerians had health insurance or similar protection.

In this system, health insurance aims to shield households from the costs of illness.

Patients also have responsibilities.

Mr Akinboade said patients need to know their health insurance package.

Different plans offer different benefits, exclusions, and limitations. Enrollees should understand what services their plans cover, the facilities they can use, and the procedures for referrals and authorisations.

Patients should also know how to report problems if care is delayed or denied. Mr Akinboade suggested that enrollees keep the contact details of their HMO’s customer service and escalate complaints when needed.

Health insurance is not just a card to show at a hospital. It involves responsibilities for patients, healthcare providers, and HMOs.

What needs to change

Improving the system will need action from everyone, Mr Akinboade said.

He added that HMOs must process claims and pay healthcare providers on time while ensuring that referrals and authorisations do not block access to care.

Healthcare providers should have trained insurance officers who understand the terms of different plans and can explain them to patients clearly.

Regulators must enforce current rules and hold organizations accountable when they fail to meet their obligations.

Meanwhile, patients should understand their benefits, exclusions, and responsibilities and use available complaint channels when facing issues.

The NHIA Act offers a way to resolve disputes among HMOs, healthcare providers, contributors, and the Authority, including mediation and conciliation.