The Lagos State Government has announced an ambitious plan to unlock more than N400 billion yearly for healthcare financing by significantly expanding enrollment into its health insurance scheme. According to the state, achieving this target will require at least 20 million residents to subscribe to the Lagos State Health Scheme, a move officials say will fundamentally reshape healthcare delivery and strengthen financial sustainability within the system.

This projection was disclosed by the Commissioner for Health, Professor Akin Abayomi, during the launch of the Lagos Private Health Partnership (LPHP)—a sweeping reform designed to unify health financing, enhance insurance penetration, and ensure that access to healthcare becomes more equitable and reliable for all Lagos residents. Abayomi explained that the N400 billion target is based on an average annual premium of N20,000 per subscriber, noting that mass enrollment is the critical determinant of success.

He emphasised that despite Lagos being Nigeria’s economic nerve centre with a population exceeding 25 million people, the state continues to face persistent challenges in healthcare funding. These include limited public health financing, low insurance uptake, rising attrition of medical professionals, widening health inequalities, and increasing medical tourism. According to him, without broad participation in a standardised insurance ecosystem, Lagos cannot build the kind of resilient, people-centred system it envisions.

A New Unified Health Financing Model

At the heart of the new reforms is the Lagos Private Health Partnership—described by Abayomi as a unified, transparent public–private framework created to replace the fragmented and often contentious health insurance marketplace that has operated for more than a decade. The commissioner highlighted that the previous system was plagued by unhealthy price undercutting, limited access for enrollees, and a significant erosion of trust among stakeholders.

LPHP introduces a digital marketplace where enrollment, provider selection, fund flow, claims administration, quality monitoring, and reporting will be executed seamlessly. The design aims to shift competition away from cost-cutting strategies toward performance and value-driven outcomes. Standardised benefit packages and quality assurance mechanisms, supervised by the Health Facility Monitoring and Accreditation Agency (HEFAMAA), will help promote transparency, reliability, and fairness across providers.

Mandatory Health Insurance to Be Enforced

Lagos operates a compulsory health insurance policy under the Lagos State Health Scheme (LSHS), popularly known as Ìlera Èkó. The policy is backed by an Executive Order issued by Governor Babajide Sanwo-Olu in July 2024, mandating all residents, employers, and workers to enroll in either the state-run scheme or an accredited private insurer before accessing non-emergency care in public facilities.

Abayomi stated that full enforcement will begin after a six-month awareness and sensitisation phase. He also announced that LPHP will introduce a state-managed risk equalisation and solidarity fund. Under this model, private insurers must contribute 13% of premiums toward supporting vulnerable residents, strengthening emergency systems, and accelerating progress toward universal health coverage.

Sanwo-Olu: A Historic Milestone

In his remarks delivered by the Secretary to the State Government, Mrs Abimbola Salu-Hundeyin, Governor Sanwo-Olu described LPHP as a historic stride in building a future-ready health financing architecture capable of protecting households from catastrophic healthcare expenditure. He said the initiative reinforces the state’s commitment to moving compulsory insurance from policy to practical, scalable implementation. Sanwo-Olu noted that the reform aligns with Lagos’ domestication of the National Health Insurance Authority Act of 2022 and would strengthen private sector healthcare delivery, which currently accounts for over 70% of health service access in the state.

Stakeholders Call for Fair Compensation

Stakeholders expressed support for the reforms but urged the government to ensure fair compensation for private providers. Dr Adebayo Adedewe, Chairman of the Lagos State Health Management Agency, described LPHP as a credible solution to long-standing inefficiencies. Similarly, Dr Jimi Arigbabuwo of the Healthcare Providers Association of Nigeria praised the reforms as a critical step in integrating private providers more effectively into Nigeria’s healthcare ecosystem.

Rising Costs Shape the Landscape

The broader context of the reform includes rising drug prices, increased hospital tariffs, and higher insurance premiums driven by inflation and import costs. Between 2024 and 2025, health insurance premiums increased between 8% and 59% across different plan categories, deepening affordability concerns for many households.

Lagos hopes that by scaling enrollment and strengthening financial protection, the new model will help reduce out-of-pocket spending, enhance service quality, and secure long-term sustainability for the state’s healthcare system.