KATHMANDU: Health insurance is a system designed to reduce the cost of healthcare services and minimize the financial risks caused by health issues.
The initiative, which began in Kailali district in 2072 BS, aims to provide access to healthcare for the general public.
The program was formalized through the Health Insurance Act of 2074 BS and Health Insurance Regulations and is currently operated by the Health Insurance Board.
For the health insurance program, which is running in 77 districts, registration assistants have been appointed at each ward of the local levels.
They inform the community and visit interested individuals’ homes to assist with form filling.
To register for health insurance, an individual must provide a photo ID, such as a national identity card, citizenship, or driving license.
In the case of minors, a certificate from their guardian is required. A separate identity card is issued to each family member enrolled in the program.
According to the current rules, a family of five must pay an annual premium of Rs 3,500, which entitles them to health services worth Rs 100,000.
The Board has requested additional funds from the government, and once the budget is approved by the Ministry of Finance, all outstanding payments will be settled.
For families with more than five members, an additional premium of Rs 700 per person is required to enroll them in the insurance program.
Services and benefits of health insurance
Those enrolled in the health insurance program can access outpatient (OPD) services, emergency services, and hospitalization. Necessary medical tests such as X-rays, ECG, ultrasound, MRI, CT scans, and blood tests are also covered.
Additionally, insurance covers listed medications from approved health institutions and allows for the performance of minor and major surgeries, such as appendix and stone removals.
Other materials like glasses, hearing aids, white canes, and walking sticks are also provided, subject to specified price limits.
Health insurance also includes provisions for specific target groups. Families facing extreme poverty, individuals with HIV, leprosy, MDR, tuberculosis, or severe disabilities are fully exempt from health insurance premiums.
Female health volunteers receive a 50% discount, while senior citizens over 70 years old are 100% exempt.
Although the health insurance program is primarily for families, senior citizens can also receive treatment services worth Rs 100,000 per year individually.
The health insurance program is open to all Nepali citizens, regardless of social class or profession. Citizens who have resided temporarily in any district for over six months are also eligible for coverage.
However, the insurance does not cover all health services. For example, glasses, hearing aids, white canes, and walking sticks beyond the annual limit set by the Board, treatment for severe polio disabilities, plastic and cosmetic surgeries (other than for cleft lip and palate), tooth extraction, and dental treatments (except for primary treatments for minor dental injuries) are excluded.
Current status of health insurance
The health insurance program, which the Government of Nepal has been running for nearly a decade through various policies, rules, and acts, is currently in a state of disarray.
Hospitals are owed over 15 billion rupees for services, while the Insurance Board has received only 7.5 billion rupees this fiscal year. No hospital has been paid since mid-Ashar.
Stakeholders argue that significant improvements are needed for the health insurance program to function effectively. There is growing concern about whether the program should continue in its current form.
To address this, the government formed a health insurance reform committee comprising experts, which has recently released a report.
According to Health Minister Pradeep Poudel, a large sum of money is required to move the health insurance program forward.
Minister Poudel, who has introduced various initiatives in the health sector, has stated that the government needs to allocate 40 billion rupees to sustain the health insurance program or find an alternative solution.
Given that the government has been allocating only 6-7 billion rupees annually for health insurance, it seems unlikely that the amount will be increased to 40 billion immediately.
This raises the question of whether the health insurance program might be discontinued due to a lack of justification for its continuation.
Dr. Akhanda Upadhyay, Medical Officer at Dolpa District Hospital, says, “As a district hospital, the payments are small, but we haven’t received them for the past two years.
Even though the amount is small, it’s significant for us. Because we haven’t received the payments, patients are not getting the medicines they are entitled to under insurance.”
Due to a lack of public awareness, only a few people opt for health insurance. While the number of insured individuals has increased somewhat compared to the past, challenges remain.
For instance, even for common diseases, patients often have to be referred outside, and the cost of transportation ends up being higher than the treatment provided by the insurance.
The program would be more effective if at least the minimum treatments specified in the insurance were available locally within the districts. However, this is not the case, and health insurance in remote areas has become expensive.
The situation has improved slightly where access to treatment has expanded through insurance, which has led to an increase in the number of insured individuals.
Various measures are being considered to make the program more sustainable, such as suggestions from the committee to deposit 2 percent of government employees’ salaries into the fund and integrate tax revenues from various sectors into the health insurance fund.
Moreover, even general treatments covered by health insurance are not available in rural hospitals. To effectively advance the insurance program, there needs to be a system of compulsory health insurance for all citizens, with a provision for offering minimum services in hospitals located in remote mountainous and hilly regions.
Only then will the program be truly effective, allowing people to access services more easily.
What does the Health Insurance Board say?
Bikesh Malla, the Information Officer at the Health Insurance Board, states, “This program is being operated in 753 local levels, covering 54 percent of health insurance providers with 8.9 million people enrolled. Health insurance renewals have been completed for the majority of the insured.”
He further mentions that service providers have received payments up until mid-Ashad, although some payments are still pending. A total of about 15.5 billion rupees remain unpaid since mid-Ashad.
The Board has requested additional funds from the government, and once the budget is approved by the Ministry of Finance, all outstanding payments will be settled.
Malla adds, “Currently, there are 465 health institutions affiliated with the program. Of these, 48 are private hospitals, while the rest are government and community health institutions. Some of these hospitals failed to provide the necessary documents when submitting claims, and we are investigating this issue and progressing with the process.”
Complaints have been received from service recipients about the health insurance services.
In response, Malla states that actions have been taken, including issuing circulars to health institutions, warning them, and even dismissing non-compliant institutions.
The Board collects around three to four billion rupees annually from insurance premiums, with an additional seven and a half billion rupees coming from the government.
This brings the total to approximately 11 to 12 billion rupees. However, the payment backlog from the previous year is estimated at 16 to 17 billion rupees.
Malla explains that the primary reason for the delay is a lack of funds in the health insurance account. If all service providers were to be paid immediately, an additional 20 to 22 billion rupees would be needed.
A common complaint is that the service provider organizations do not manage medicines effectively, and the prescribed medications are unavailable at pharmacies.
“Currently, about 40 to 42 percent of the insured are utilizing the services. As the number of insured individuals increases each year, so do the costs. Since the premiums alone are insufficient to cover these expenses, the shortfall is being covered by the insurance fund. Therefore, there is a need to strengthen the fund,” Malla adds.
How feasible is it to create a five-lakh convenience fund?
Malla acknowledges that no single party can strengthen or improve the health insurance program on its own.
Various measures are being considered to make the program more sustainable, such as suggestions from the committee to deposit 2 percent of government employees’ salaries into the fund and integrate tax revenues from various sectors into the health insurance fund.
He emphasizes that progress should be made based on these recommendations.
“This is a social security program. The Ministry of Health runs many such programs. If all these programs were managed through a single system, the insurance fund would become stronger, and the facilities could increase from one lakh to two or even five lakh,” Malla explains.
From a patient’s rights perspective, he points out that one lakh rupees is not sufficient. To increase the available facilities, the fund needs to be bolstered.
He reassures that the government is committed to moving forward with the various suggestions provided by the committee to strengthen the fund.
Complaints from the insured
Spokesperson Malla notes that the most frequent complaints in the health sector relate to health insurance. Some complaints are about the hospitals, while others concern the Board itself.
A common complaint is that the service provider organizations do not manage medicines effectively, and the prescribed medications are unavailable at pharmacies.
Malla says that the Board has been actively monitoring the health institutions involved in the insurance program and addressing these issues to improve service delivery.
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