Summary: The health insurance scheme has stalled due to financial crises, with some hospitals having already ceased services. The Health Insurance Board requires an annual budget of 2.6 billion NPR, but the government and premium contributions provide only 1.4 billion NPR. Concerns have been raised that without improvements to the health insurance program, poor and vulnerable citizens will be deprived of healthcare services.
Kathmandu, 15 Chaitra – The health insurance program is currently at a standstill. Following escalating financial difficulties, several major hospitals have stopped offering services. Government hospitals, including Bir Hospital, have reduced their services, leaving poor and marginalized groups unable to access healthcare.
Following the National Independent Party’s (Rastriya Swatantra Party – RASWPA) ascent to government with nearly a two-thirds majority, there were expectations for certain reform initiatives. This was the understanding among ministry officials. On Saturday, the new government led by Balen Shah released a list of 100 governance reform tasks. However, the important health insurance program did not make it onto the government’s priorities in the health sector.
An official from the Health Insurance Board stated that the program is on the brink of closure. “Health insurance is the only program through which poor and vulnerable groups can conveniently receive treatment,” the official said. “It is very disheartening that health insurance was excluded from the government’s governance reform priorities.”
Launched in fiscal year 2071/72 with the goal of including all citizens under health insurance within five years, the program has not achieved the expected results even after ten years. The insurance scheme was initiated to provide health services to all without financial hardship and to maintain service quality, but it now exists mostly on paper.
Dr. Senendra Raj Upreti, former chairman of the Health Insurance Board and former Health Secretary, described the failure to prioritize health insurance as a major error. “Health insurance is an extremely sensitive issue and must be prioritized,” he said. “If it is not addressed clearly, health workers, insured individuals, and citizens remain unmotivated.” Dr. Upreti emphasized that the government must seriously give priority to reforming and strengthening the health insurance system. “There is no alternative to this reform. If health insurance is not prioritized, the crucial question arises: how will poor and vulnerable citizens access health services?” he added.
Nepal aims to provide universal health coverage to all by 2030, with health insurance serving as a key means toward this goal. According to Health Insurance Board officials, the insurance is currently facing severe financial crisis. Board spokesperson Bikesh Mall explained that delays in timely payments to service provider hospitals have led to increasing complaints from patients regarding unavailability of medicines and services.
The board estimates a requirement of 2.6 billion NPR annually, but only 1.4 billion NPR is raised from government grants and premiums combined. The government has disbursed over 1.6 billion NPR to health institutions up to the end of Falgun. According to Mall, “The primary issue is the inability to pay service providers on time. Insured patients have been complaining about not receiving medicines and services.”
As hospitals began suspending services, complaints via calls, emails, and in person from insured patients have surged. Hospitals have reported limiting services due to non-payment. If the current financial crisis is not swiftly resolved, the situation risks becoming more complex. Payment shortages have led to deteriorating services, increased dissatisfaction among insured individuals, and declining renewal rates. Previously, renewal rates ranged between 60 and 80 percent, but now there is concern it will fall below 50 percent due to weakened services.
This combination of rising complaints, falling renewal rates, and constrained budgets has put the health insurance program under significant pressure. “The main solution to the problem is securing adequate budget. Additionally, attention must be paid to service improvements in hospitals, medicine shortages in pharmacies, and insured patient grievances,” the official stated.
The board also shared that adding new insured individuals has become difficult, and yearly renewals are increasingly challenging because citizens feel their expectations for services are unmet. Weak infrastructure and limited staffing at major government hospitals force thousands of patients to endure long waits and doctors are unable to spend adequate time with every patient. Equipment malfunctions for additional tests result in delays, causing significant patient hardship. It has become common for medicines covered by insurance to be unavailable at pharmacies. There is also discrimination between insured and uninsured patients, where insured individuals are sometimes treated as second-class citizens in hospitals, fostering negative perceptions of the program.
After hospitals threatened to terminate health insurance services on 21 Magh, former Prime Minister Sushila Karki convened an emergency meeting to address the problems. The meeting included Health Minister Dr. Sudha Gautam, representatives from the Ministry of Finance, and board members. At the time, former Health Minister Dr. Sudha Sharma reported that an immediate 1.4 billion NPR was needed and lamented the lack of support from the Ministry of Finance despite round-the-clock efforts to resolve insurance issues.
Minister Sharma urged, “I earnestly request everyone at the Ministry of Finance: pay the outstanding 1.1 billion NPR from last year. This year, I will spend 1 billion frugally and bring reform programs in the future. If that amount is not provided, allow Health Ministry hospitals to close.” There was even a dispute between Finance Secretary Ghanshyam Upadhyay and Minister Sharma. The Finance Ministry stated that it currently cannot allocate additional funds to the board. Secretary Upadhyay mentioned that although problems existed in health insurance earlier, the Health Ministry had not taken leadership. He remarked, “The health insurance model isn’t functioning well; it is not insurance but a welfare program.”
After discussions between the Health Minister and the Finance Secretary, Prime Minister Karki committed to securing financial resources to resolve the crisis. “The government is sensitive to the rights citizens must receive, so the problem must be solved,” she said. “Whether by borrowing or finding other resources, this issue must be addressed. The Finance Minister is currently abroad; upon his return, budget arrangements will be discussed. Citizens must receive the rights they are entitled to.”
More than a month has passed since then. Despite multiple discussions, Prime Minister Karki was unable to resolve the financial crisis of the insurance and later resigned from her post. Attempts to contact Health Minister Nisha Mehtas have not yielded any response, and her associates have reportedly stated that she will refrain from speaking to the media for some time. “It has been decided not to make any statements for at least a week,” an associate said.
