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Abstract: Sourcing finance for quality universal health care remains a major challenge in Nigeria, despite the key role health plays in a nation's economic development. The often dysfunctional state of public sector health facilities and the high degree of consumer dissatisfaction with publicly-financed health care have resulted in the loss of a form of social protection for a large portion of the population, especially rural households and informal sector employees. This paper reviews the
economics of health insurance in Nigeria to determine the key research issues and review the established facts, while identifying the major
challenges for an accurate assessment of the economic impact of health insurance.
Nigeria operates a health insurance system which is a public-private combination. Although still small, the market for private health insurance
coverage is gradually expanding across the country. Due to recent developments in the system and resultant evidence regarding performance, policy goals for the health insurance sector in Nigeria may require reassessment. While the National Health Insurance Scheme (NHIS) has made progress in extending coverage, the issues of a
functioning regulatory framework and effective institutional arrangements require further improvement. Presently, various community-based health financing schemes are available in Nigeria, but the level of social capital in the community will determine the long-term impact. Other research issues include how to optimally use parallel public and private health insurance within the Nigerian context where health systems are weak, and how to design alternative health insurance strategies to improve financial protection and access to care in such settings. This paper highlights a range of empirical questions that need to be answered if the
economics of the current public-private health care combination, health insurance and health financing are to be properly assessed.

JEL classification: I13

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