FG’s Health Insurance Deductions: Reform, Shock & The Road To Universal Coverage

WITH October salaries, federal civil servants received an unexpected jolt: a deduction ranging from ₦1,000 to ₦2,000. For many, it was an unwelcome surprise in a season of rising living costs. For the Federal Government, however, it marked the quiet rollout of a major policy—mandatory contributions to the National Health Insurance Scheme (NHIS).

In a circular titled “Implementation of Statutory Deduction for the National Health Insurance Scheme” and obtained in Abuja, the government explained that the deductions, which began in October 2025, were part of legally required contributions across Ministries, Departments and Agencies (MDAs). The announcement followed widespread complaints on social media from workers demanding answers over unexplained cuts to their pay.

The directive is not entirely new. The National Health Insurance Authority (NHIA) Act, signed by former President Muhammadu Buhari in 2022, made health insurance compulsory for all employers and employees across public, private and informal sectors. The legislation was hailed as a landmark attempt to move Nigeria closer to Universal Health Coverage (UHC). Its chief sponsor, former Senator Yahaya Oloriegbe, described it as a pathway to “a robust, affordable and sustainable financial mechanism for health.”

Yet, as with many reforms, the implementation has exposed the tension between policy ambition and public sentiment.

The Promise and the Pushback

The Federal Government insists the deductions are designed to strengthen access to quality healthcare, reduce out-of-pocket spending and better protect workers from catastrophic medical bills. According to the circular, more than 99 per cent of federal employees are already enrolled under the NHIS framework, which promises a wider coverage of services and improved financial risk protection.

The administration also touted recent expansions of the scheme. Last week, President Bola Tinubu’s Chief of Staff, Femi Gbajabiamila, announced that coverage had grown from 20 million to 60 million Nigerians—an unprecedented leap if the figures hold true.

But the backlash from civil servants reveals a deeper issue: reforms introduced without adequate communication often feel like penalties rather than progress. At a time when inflation, utilities and transportation costs are squeezing household budgets, even a ₦1,000 deduction becomes symbolic—another reminder of the widening gap between government intentions and citizen realities.

Why This Reform Matters

Nigeria’s health financing system remains one of the weakest in Africa. Out-of-pocket spending accounts for over 70 per cent of total health expenditure—one of the highest rates globally—pushing millions into poverty each year. The NHIS, if fully funded and effectively managed, could significantly reduce that burden.

Mandatory contributions from workers are meant to guarantee a steady flow of funds, strengthen the primary healthcare system and support a more predictable insurance pool. Economists argue that, in principle, such deductions are necessary to build a universal and sustainable healthcare system.

The Bigger Question: Trust

However, the success of any mandatory health insurance model hinges on public confidence. Workers must believe deductions will translate into real, accessible and reliable healthcare. That trust has been historically fragile, weakened by concerns over service quality, bureaucratic hurdles and inconsistent communication from government agencies.

This latest rollout—implemented quietly and discovered through salary slips—risks reinforcing that skepticism.

A Step Forward, But Not Without Friction

The commencement of NHIS salary deductions marks a pivotal moment in Nigeria’s health reform journey. It signals a government attempting to restructure healthcare financing, even as citizens grapple with economic pressures.

To keep this policy from becoming another point of resentment, the government must strengthen communication, engage unions and provide transparency on benefits, coverage details and service improvements.

A reform meant to protect citizens should not feel like a burden. Whether this policy becomes a foundation for national health progress—or just another recurring deduction—depends on how well government bridges that gap.