OBJECTIVES: To evaluate the NHIS in terms of health financing sub-functions of revenue collection, risks pooling, and purchasing of health care using Ashiedu Keteke Mutual Health Insurance as a case study.  METHODS: The review and participant observation methods were employed to analyze secondary data of the NHIS. A data compilation sheet was used to collect membership, revenue and expenditure data whilst reviews were conducted on NHIS website, annual reports, Ministry of Health reports and other published literature.  RESULTS: Out of 158,466 members who registered over the period under study (2005-2012), about 30% were active card-bearing members. The population coverage increased consistently from 6.4% in 2005 to 29.9% in 2012 with children below eighteen years of age as major membership driver, representing 42.2% of total membership. Membership is legally mandatory and household-based with children below eighteen years being automatically qualified when both parents are registered. The NHIS is largely tax-funded; extent of prepayment contributions declined over the study period from 20% to 15.4%. There is comprehensive one-for-all benefit package to ensure equity and adequate financial protection. The provider payment mechanism changed from fee-for-service in 2005 to Diagnostic Related Groupings (DRG) in 2008; although, fee-for-service is still used to pay for medicines supplied to insured members. In 2011, capitation payment was implemented for out-patient services at primary health centres. The administrative expenditure is relatively high; however, it declined over the study period from 42.1% in 2006 to 13.3% in 2012.  CONCLUSIONS: The population coverage of the NHIS is increasing with a decreasing trend in administrative expenditure. Given that membership groups exempted from paying contributions represent more than fifty percent and extent of prepayment is declining, transfer of large scope of government subsidies would be necessary to ensure long-term financial viability.