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Abstract: Despite the growth and the key role of health in the economic development of a country, financing quality universal health care is still a major challenge in Nigeria. The dysfunctional state of public sector health facilities and low levels of consumer satisfaction 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 those working in the informal sector. This paper aims to explore the economics of health insurance in Nigeria. Within the broad framework, it attempts to identify the key issues for research, review what is known about them, and identify the major challenges for proper assessment of the economic impact of health insurance. Nigeria operates public-private mix of health insurance system. Although private health insurance coverage is still low, the market is expanding across the country. Therefore, policy goals for the health insurance sector in Nigeria may require reassessment in light of recent evolutions in the system and evidence of its performance. While NHIS has made progress in extending coverage, the issues of functioning regulatory framework and effective institutional arrangements still requires further improvement. Presently, there are various community-based health financing schemes in Nigeria today, but the long term impact will depend on the level of social capital in the community. Other issues on the research agenda are how to make the best possible use of parallel public and private health insurance in Nigerian settings where health systems are weak and how to design alternative health insurance strategies to improve financial protection and access to care in such settings. However, this paper has highlighted a range of empirical questions that need to be answered if the economics of the current public–private mix
in health care, health insurance and health financing are to be properly assessed.