KATHMANDU: The government is preparing to restructure the national health insurance program and operate it in line with the principles of a genuine insurance system, Finance Minister Swarnim Wagle said on Wednesday.
Speaking at a meeting of the parliamentary Finance Committee, the minister emphasized the need to address irregularities and misuse that have emerged in the current health insurance scheme.
According to Wagle, the government allocated Rs 10 billion for the health insurance program in the previous fiscal year and Rs 15 billion in the current fiscal year. An additional Rs 5 billion has recently been arranged, including Rs 2 billion that remained unspent by the Ministry of Health and Population and Rs 3 billion provided by the Ministry of Finance.
The finance minister warned that the program’s liabilities have been rising uncontrollably and stressed the need to transform it into a financially sustainable model.
“At the current rate, expenditures could eventually reach Rs 100 billion. There have also been widespread complaints regarding misuse of the insurance program,” he said.
Wagle noted concerns such as unnecessary medical tests, excessive spending beyond patients’ actual needs, and activities aimed at inflating insurance claims. He said these distortions have caused even major community hospitals to face financial difficulties due to delays in reimbursement payments.
The minister said he has urged the Minister for Health and Population to take the initiative in restructuring the program. He added that the current model should gradually move away from being primarily a social security scheme and evolve into a true insurance-based system.
Under the proposed framework, the state would continue to subsidize premiums for low-income and vulnerable citizens, while middle- and higher-income groups would receive benefits based on their level of contribution.
Wagle also said the government is considering creating a dedicated fund supported by revenues from “sin taxes” imposed on products such as alcohol and tobacco to ensure the long-term sustainability of the health insurance program.
“The more people regularly pay insurance premiums, the more sustainable the program becomes. If only the sick and elderly enroll while younger people stay out, it ceases to function as health insurance and becomes merely a social security program,” he said.
The government aims to complete the restructuring of the health insurance program within the current fiscal year. Discussions are also underway to integrate the Rs 15 billion allocated for health insurance with resources from other welfare programs operating in the health sector, he added.
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