Health Expenditure Forecasting and Actuarial Sustainability of Universal Health Coverage in Nigeria

This study develops actuarial health expenditure forecasting models to assess the long-run financial sustainability of universal health coverage in Nigeria under the NHIA Act 2022. Nigeria's UHC ambition is set against a backdrop of low public health expenditure, significant disease burden, and rapid population growth, creating a complex actuarial challenge in estimating the cost of universal coverage. Sustainable financing requires credible actuarial projections of aggregate health expenditure under universal enrollment scenarios, taking into account utilization patterns, medical cost inflation, demographic change, and benefit package design. This study uses household health expenditure data from the National Living Standards Survey, NHIA claims data, and Federal Ministry of Health health account data for 2018 to 2023. Age-sex specific healthcare utilization and cost curves are constructed. National health expenditure under three UHC enrollment scenarios is projected to 2035 using cohort-component demographic projections combined with service utilization and cost models. Findings reveal that universal enrollment by 2030 would require total health expenditure to increase from approximately 3.7 percent of GDP currently to between 5.8 and 7.2 percent of GDP by 2035, depending on benefit package scope and medical inflation trajectory. The study concludes that Nigeria's UHC aspiration faces a significant financing gap that requires both domestic resource mobilization and external development finance. It recommends that NHIA commission annual actuarial sustainability assessments and publish 5-year health expenditure forecasts to inform fiscal planning.

Keywords: universal health coverage, health expenditure forecasting, NHIA, actuarial sustainability, Nigeria.