Assessing the Impact of the Lagos State Social Health Insurance Scheme on Catastrophic Health Expenditure for Informal Sector Traders in Alimosho LGA: A 24-Month Policy Analysis

Catastrophic health expenditure (CHE) is a major obstacle to universal health coverage in Nigeria, especially for informal sector workers. The Lagos State Social Health Insurance Scheme (LSSHIS) was established to enhance financial protection. Its specific effect on vulnerable populations, such as traders in high-density areas like Alimosho Local Government Area (LGA), requires evaluation to guide policy. This policy brief assesses the impact of the LSSHIS on the incidence of CHE among informal sector traders in Alimosho LGA over 24 months. It seeks to evaluate the scheme’s effectiveness in providing financial risk protection for this group. A mixed-methods policy analysis was employed. Quantitative data on health expenditures and insurance enrolment were collected from a cohort of informal traders. Qualitative insights were obtained through focus group discussions with community stakeholders to contextualise the quantitative results. Enrolment in the LSSHIS was linked to a reduction in CHE incidence. Among insured traders, the proportion experiencing CHE decreased by approximately 40% over the period studied. However, qualitative data identified persistent barriers to enrolment, including limited awareness and perceived complexity of registration processes. The LSSHIS shows a positive effect in protecting enrolled informal sector traders from catastrophic health costs. However, low uptake constrains its broader population impact. The scheme’s design and implementation need adjustment to improve accessibility and awareness. Policy should focus on simplifying enrolment procedures and implementing targeted awareness campaigns within informal sector clusters. Additionally, subsidising premiums for the lowest-income traders and expanding the network of accredited primary care providers in Alimosho LGA are essential steps. Health insurance, catastrophic expenditure, informal sector, universal health coverage, financial protection, Nigeria, policy analysis This analysis provides evidence on the effect of a sub-national health insurance scheme on financial protection for informal workers. It offers specific, actionable recommendations for policymakers seeking to reduce catastrophic health expenditure and improve scheme uptake in urban, high-density settings.