In Lagos, health insurance is no longer being framed as a lifestyle upgrade or a welfare add-on. It is being presented as an economic necessity.

At a recent two-day capacity-building workshop for journalists organised by the Lagos State Health Management Agency (LASHMA) in collaboration with the International Society of Media in Public Health, the message was direct and uncompromising.

The Permanent Secretary of LASHMA, Dr Emmanuella Zamba, told participants that enrolling in the state’s ILERA EKO health insurance scheme is no longer optional — it is essential for financial security.

“When you set aside this affordable sum, you guarantee health for your family,” Dr Zamba said. “You can then plan for better schools or housing. If you leave your health to chance, you can impoverish your family overnight.”

Her words capture the deeper logic behind ILERA EKO: health shocks are among the fastest ways for families to fall into poverty, and structured risk pooling through insurance is one of the few mechanisms that can prevent that spiral.

But beyond rhetoric, what does ILERA EKO actually represent? How does its pricing structure compare to healthcare costs? Why is Lagos intensifying enrollment efforts now? And what does this mean for Nigeria’s broader health financing system?

This article examines ILERA EKO’s structure, its economic implications, its role in Lagos State’s fiscal and social policy framework, the risks and opportunities it faces, and why universal health coverage remains both urgent and complex.

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The Core Message: Health Insurance as Financial Infrastructure

Dr Zamba’s framing of health insurance as a financial planning tool rather than a medical product is significant.

In many emerging economies, health expenses are primarily out-of-pocket. When a major illness strikes, families often:

• Liquidate savings.
• Sell assets.
• Take high-interest loans.
• Withdraw children from school.
• Delay or forgo treatment.
• Fall into long-term debt cycles.

The World Health Organization (WHO) has consistently warned that catastrophic health expenditures are a leading driver of household poverty in low- and middle-income countries.

Nigeria, with its large informal sector and limited social safety nets, is particularly vulnerable.

Lagos State’s ILERA EKO scheme aims to shift that burden from unpredictable household spending to structured annual contributions.

Understanding ILERA EKO’s Pricing Structure

One of the most compelling aspects of the scheme is its affordability positioning.

The pricing tiers are as follows:

• Standard individual – ₦10,000 per year
• Standard Jara individual – ₦15,000 per year
• Standard Jara Plus individual – ₦40,000 per year
• Family packages for households of four or six (scaled pricing)

At face value, ₦10,000 annually — roughly equivalent to modest household discretionary spending — appears accessible relative to potential hospital bills.

Even the ₦40,000 Jara Plus package, which presumably provides expanded benefits, remains significantly lower than the cost of even one moderate medical emergency in private facilities.

This pricing strategy reflects risk pooling principles:

• Large enrollment base.
• Cross-subsidisation.
• Cost spreading over time.
• Predictable premium structure.

However, affordability must be viewed relative to income volatility in the informal sector. Even modest annual payments can feel burdensome without stable earnings.

Provider Network Expansion: Infrastructure as Confidence Builder

LASHMA has expanded its provider network to 706 facilities across all Local Government Areas, including:

• 207 Family Health Centres
• 25 General Hospitals
• 2 Federal Hospitals

Network depth matters.

Insurance schemes fail when beneficiaries cannot access services easily. By expanding the provider base geographically, Lagos State reduces one of the most common barriers to health insurance adoption: proximity.

In addition:

• Broad network coverage increases enrollment appeal.
• More facilities reduce congestion pressure.
• Diversified provider participation improves service choice.

Multi-Channel Enrolment Strategy

To increase uptake, LASHMA has simplified enrolment through multiple channels:

• USSD: Dial 6700006#
• Online portal
• In-person enrolment at headquarters or designated points
• ILERA EKO web-based mobile app (Google Play launch pending)

Digital accessibility is critical in Lagos, where mobile penetration is high. USSD access, in particular, allows enrollment without smartphones or data plans, broadening reach to lower-income residents. Ease of enrollment reduces friction, which is often a hidden barrier in insurance adoption.

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Historical Context: Nigeria’s Health Insurance Challenges

Nigeria has struggled with low health insurance penetration for decades.

National Health Insurance Scheme (NHIS) coverage has historically been limited, especially outside formal employment sectors.

Barriers include:

• Informal workforce dominance.
• Trust deficits in public institutions.
• Weak enforcement of employer participation.
• Limited awareness.
• Administrative inefficiencies.
  

Lagos, as Nigeria’s largest commercial hub, has greater fiscal capacity than most states. ILERA EKO represents a state-level solution tailored to local realities.

Why Lagos Is Pushing Hard Now

Several factors may explain renewed urgency.

1. Urban Health Pressures

Lagos is Africa’s most populous city. Urban density increases exposure to communicable diseases and lifestyle-related chronic conditions.

2. Fiscal Risk Mitigation

Uninsured populations strain public hospitals. Insurance funding provides more predictable revenue flows to facilities.

3. Poverty Reduction Strategy

Preventing medical impoverishment supports broader socioeconomic stability.

4. Alignment with Universal Health Coverage Goals

Nigeria has committed to universal health coverage (UHC) targets under global health frameworks.

Economic Impact: Health as Productivity Protection

Health insurance is not merely social policy; it is economic infrastructure.

Healthy populations:

• Miss fewer workdays.
• Maintain productivity.
• Reduce economic volatility.
• Support consumption stability.

For Lagos, protecting its workforce means protecting its tax base and commercial vibrancy.

Risks and Challenges

No insurance scheme is without challenges.

1. Adverse Selection

If only high-risk individuals enrol, cost sustainability becomes strained.

2. Claims Management

Efficient provider reimbursement is critical to maintain network trust.

3. Fraud Risk

Insurance systems require strong verification mechanisms.

4. Awareness Gap

Public education remains essential to shift mindset from reactive care to preventive coverage.

Comparative Perspective: Other Emerging Markets

Countries like Rwanda have achieved high health insurance coverage through community-based models.

Ghana’s National Health Insurance Scheme (NHIS) also expanded access significantly, though funding sustainability remains debated.

Lagos can learn from:

• Rwanda’s high enrolment enforcement.
  
• Ghana’s premium and subsidy balance.
  
• Kenya’s NHIF reform efforts.

Long-Term Outlook: What ILERA EKO Could Become Over the Next 5–10 Years

When evaluating a public health insurance scheme like ILERA EKO, the real question is not what it does today — but what it evolves into over time.

If properly implemented, funded, and governed, ILERA EKO has the potential to fundamentally reshape health financing in Lagos State.

Here’s how.

1. Expansion of Risk Pooling and Financial Stability

What Happens Over Time?

As more residents enrol, the risk pool becomes larger and more diversified. This reduces volatility in claims.

Insurance works best when:

• Many low-risk individuals subsidise fewer high-risk cases.
• Contributions are predictable.
• Claims patterns stabilize over time.

Long-Term Outlook

If enrollment reaches meaningful penetration (for example, 40–60% of Lagos residents), ILERA EKO becomes financially self-reinforcing rather than subsidy-dependent.

A broad risk pool:

• Reduces per-capita cost pressure.
• Improves actuarial predictability.
• Makes premium increases less frequent.
• Strengthens sustainability.

Without scale, however, insurance becomes fragile. So long-term success depends heavily on mass adoption.

2. Strengthening of Healthcare Infrastructure

Insurance schemes change hospital behavior.

What Happens When Facilities Receive Predictable Payments?

Hospitals can:

• Invest in better equipment.
• Hire more staff.
• Improve quality standards.
• Digitize records.
• Expand preventive services.

When funding is unpredictable (as with pure out-of-pocket systems), facilities operate reactively.

With insurance-backed flows:

• Revenue becomes forecastable.
• Long-term planning becomes possible.

Long-Term Effect

Over time, ILERA EKO could:

• Improve the quality of public facilities.
• Reduce overcrowding in tertiary hospitals.
• Encourage private providers to join the network.
• Create competitive pressure to improve standards.

In effect, insurance can raise the baseline quality of care across the ecosystem.

3. Reduction in Medical Poverty Cycles

One of the most powerful long-term effects relates to household financial stability.

Health shocks are among the top drivers of poverty in developing economies.

Without insurance:

• Families liquidate savings.
• Children leave school.
• Small businesses collapse.
• Debt accumulates.

With insurance:

• Treatment costs are spread.
• Savings are preserved.
• Education continuity is maintained.
• Asset liquidation is avoided.

Long-Term Economic Effect

Over 10 years, widespread coverage can:

• Reduce household wealth volatility.
• Increase intergenerational stability.
• Strengthen middle-class formation.
• Reduce dependency on emergency government bailouts.

This has compounding macroeconomic effects.

4. Cultural Shift Toward Preventive Healthcare

Currently, many households only seek medical care when illness becomes severe.

Insurance changes behavior.

When coverage exists:

• People are more likely to attend check-ups.
• Preventive screenings increase.
• Early diagnosis rates improve.
• Chronic conditions are managed earlier.

Long-Term Health Outcomes

• Lower long-term treatment costs.
• Reduced emergency admissions.
• Better life expectancy.
• Lower burden of unmanaged diabetes, hypertension, and maternal complications.

Preventive health is cheaper than emergency care — but it requires system alignment. ILERA EKO could gradually shift Lagos toward prevention-first health culture.

5. Impact on Lagos State Fiscal Planning

A fully functioning health insurance scheme changes government budgeting.

Instead of:

• Emergency funding surges,
• Ad hoc hospital subsidies,
• Crisis-driven bailouts,

The state can operate on:

• Structured health expenditure forecasting.
• Premium-based revenue models.
• Targeted subsidies for vulnerable groups.

Long-Term Fiscal Effect

• More predictable healthcare spending.
• Reduced budget volatility.
• Stronger ability to allocate funds to infrastructure and education.

Over time, this improves state-level financial management.

6. Digital Health Ecosystem Growth

ILERA EKO already includes:

• USSD enrollment.
• Online portal.
• Mobile app (expanding).

As digital integration deepens, long-term possibilities include:

• Digital medical records.
• Claims automation.
• Fraud detection systems.
• Data-driven policy decisions.
• AI-supported risk assessment.

Over 5–10 years, this could create one of the most advanced state-level health data systems in Nigeria.

Data improves:

• Planning.
• Transparency.
• Cost control.
• Outcome measurement.

7. Influence on Other Nigerian States

If ILERA EKO succeeds at scale, Lagos could become a template model. Nigeria’s federal health insurance coverage remains low.

Other states may:

• Replicate Lagos’ pricing model.
• Copy its provider network approach.
• Adopt similar digital enrolment strategies.

In the long term, ILERA EKO could influence national reform momentum.

Long-Term Effects: What Could Go Right — and What Could Go Wrong

It’s important to evaluate both positive and negative long-term scenarios.

Positive Scenario: Sustainable Universal Coverage Model

If managed well, ILERA EKO could achieve:

• High enrollment rates.
• Stable claims ratios.
• Strong provider participation.
• Minimal fraud.
• Affordable premiums.
• Political continuity.

In that case:

• Health insurance becomes normalized.
• Lagos residents treat coverage as a standard utility expense.
• Public-private health collaboration improves.
• Lagos becomes a leader in African urban health insurance models.

Risk Scenario 1: Low Enrolment Stagnation

If uptake remains limited:

• The risk pool remains small.
• Claims volatility increases.
• Premium pressure rises.
• Public confidence weakens.

Insurance without scale becomes fragile.

Risk Scenario 2: Provider Payment Delays

If reimbursement processes slow down:

• Hospitals may withdraw.
• Service quality declines.
• Beneficiaries lose trust.
• Negative public perception spreads.

Claims management discipline is critical.

Risk Scenario 3: Political Disruption

Long-term sustainability depends on:

• Policy continuity.
• Budgetary support.
• Administrative stability.

Changes in leadership can disrupt implementation momentum.

Risk Scenario 4: Inflation Pressure

Medical inflation often rises faster than general inflation.

If:

• Drug costs rise sharply,
• Exchange rates fluctuate,
• Equipment import costs increase,

Premium adjustments may be required. Frequent premium hikes could weaken affordability positioning.

Strategic Long-Term Questions to Monitor

To evaluate ILERA EKO’s trajectory, watch these indicators over time:

1. What percentage of Lagos residents are enrolled?
2. Are renewal rates increasing year over year?
3. Are claim settlement times improving?
4. Is the provider network expanding or shrinking?
5. Are out-of-pocket payments declining?
6. Is catastrophic medical expenditure falling?

These metrics determine long-term success.

Macro-Level Long-Term Effects on Lagos Economy

Beyond healthcare, ILERA EKO could:

1. Improve Workforce Productivity

Healthy workers reduce absenteeism.

2. Strengthen Consumer Confidence

Households with risk protection spend more confidently.

3. Attract Expatriates and Investors

Structured health systems increase urban attractiveness.

4. Reduce Informal Borrowing

Medical debt often fuels informal lending cycles.

Final Perspective: A Structural Reform, Not Just a Health Policy

ILERA EKO’s long-term outlook is less about annual premiums and more about structural transformation.

If successful, it could:

• Reduce poverty volatility.
• Modernize healthcare delivery.
• Improve fiscal stability.
• Institutionalize preventive care.
• Strengthen Lagos’ economic resilience.

If mismanaged, it risks:

• Trust erosion.
• Funding strain.
• Political backlash.

The difference between those two futures lies in governance discipline, enrolment scale, and operational transparency.

Closing Thought

Health insurance schemes do not transform societies overnight.

But over a decade, when properly scaled, they quietly reshape:

• Household behavior.
• Healthcare systems.
• Fiscal structures.
• Economic resilience.

ILERA EKO’s long-term effects will depend not on its launch moment but on its execution trajectory. And that trajectory is just beginning.

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