KATHMANDU: Health insurance is a key social security program introduced by the government to provide financial protection by managing the risk of healthcare costs incurred through the use of health services.
Launched in 2072 BS with the goal of ensuring access to health services for all Nepali citizens based on social health insurance, the program aims to improve accessibility to quality healthcare services.
It is currently being operated by the Health Insurance Board.
Although the program has been effective for some time, it is now facing challenges.
It covers 35 percent of the population and partners with 460 hospitals to serve the economically vulnerable, the chronically ill, and those with long-term diseases. However, recent disruptions have left the program in a state of disarray.
Leadership vacancies and service disruptions
The resignation of Chairman Gunaraj Lohani and the completion of Executive Director Damodar Basaula’s four-year term have left the Health Insurance Board without leadership.
However, the payment process was delayed due to the need for a thorough review and confirmation of health insurance claims by insurance employees, explained Dr. Saroj Sharma, Acting Executive Director of the Health Insurance Board.
Many private and government hospitals have stopped providing services, and beneficiaries are complaining that they have not received the promised benefits despite paying their annual insurance premiums.
Meanwhile, the government has been discussing amendments to the Health Insurance Act, with the aim of making health services more effective.
However, experts argue that no matter how many laws are enacted, real change won’t happen unless issues at the operational level are addressed.
Hospitals face financial hardships
Several hospitals participating in the health insurance program have not received payments for services rendered, leading some to stop their services.
Hospitals in the Kathmandu Valley, including Bir Hospital, Teaching Hospital, and Shaheed Gangalal Hospital, have not received payments since the last fiscal year.
Maharajgunj Teaching Hospital, which had suspended its services after an outstanding payment of Rs 690 million, resumed operations on Magh 7, following a decision by the board to scrap the facility bag and pay patients according to the cost of each service and material.
Bir Hospital is still awaiting Rs 106 million in payments, while Shaheed Gangalal Heart Disease Center in Bansbari is owed Rs 80 million for services provided last fiscal year and up until mid-Poush, according to Sudip Dahal, the hospital’s information officer.
Hospitals outside the Kathmandu Valley are also struggling due to delayed payments.
For example, Bheri Hospital in Nepalgunj has not received a total of Rs 100 million, including Rs 40 million from the previous fiscal year and Rs 60 million so far this year.
Overall, the board has failed to pay Rs 11 billion to hospitals nationwide.
Government efforts for reform
While the health insurance program faces significant challenges, the government is taking steps to address the issues.
On Monday, Minister of Health and Population Pradeep Poudel advanced a reform plan based on the report from the Health Insurance Reform Suggestions Task Force.
The Ministry’s secretariat confirmed that internal preparations for practical, policy-level, and long-term reforms are underway.
Minister Poudel has also formed an internal task force, coordinated by Additional Secretary Dipendra Raman Singh, to work on the reforms.
Other members of the task force include Dr. Saroj Sharma, Director Dr. Anup Bastola, Under-Secretary for Law Gopikrishna Regmi, and Under-Secretary Shalikram Dahal, who serves as the member secretary.
Additionally, Prime Minister KP Sharma Oli directed the Ministry of Health and Population to prepare an action plan for reforms based on the task force’s report.
Amendments to the Health Insurance Act
Health Minister Poudel proposed an amendment to the Health Insurance Act to make health insurance more effective.
The proposal was approved by the Council of Ministers, resulting in changes to the 2074 Health Insurance Act.
Under the amended law, the Health Insurance Board now requires at least one service provider organization to be included in agreements at each level.
The amendments are expected to address the issue of insured members being unable to access services at their local municipality level.
Under the previous system, individuals had to seek a referral from their permanent address to access services, but the new provision allows insured members to choose the health institution where they will first seek care.
Concerns surrounding delays in Health Insurance payments and policy amendments
The Ministry believes that the recent amendment of regulations will significantly reduce the need for beneficiaries to travel from their workplace to their permanent address to access health insurance benefits.
While some citizens, particularly those below the poverty line, have received discounts, this system does not address the needs of economically successful citizens who still struggle to access healthcare.
Minister Poudel had previously committed to ensuring that insured individuals can receive services at their local facilities, regardless of their permanent address.
Why has Health Insurance not been paid?
The law mandates that claims from listed health institutions be paid within 15 days.
However, there is still a backlog of seven billion rupees in unpaid claims from the previous fiscal year alone.
Adding this year’s claims brings the total outstanding amount to 11 billion rupees.
According to data from the Health Insurance Board, 449 listed health institutions have implemented the insurance program across the country.
However, the payment process was delayed due to the need for a thorough review and confirmation of health insurance claims by insurance employees, explained Dr. Saroj Sharma, Acting Executive Director of the Health Insurance Board.
The board’s payment system includes scheduled payments every three months, but delays occurred because claims from across the country could not be confirmed on time, Dr. Sharma added.
Administrative delays
Former Chairman of the Health Insurance Board, Gunaraj Lohani, attributes the delay in the payment process to a lack of administrative efficiency.
Status Quo: Experts weigh in
Lohani believes the government must take the issue seriously and act with determination, as it affects the health of citizens.
“When I took responsibility, I promised to resign if I couldn’t deliver as promised. I resigned in line with that commitment. If this situation continues, this program will be shut down,” Lohani said.
“This issue is not just party-specific; it’s a national agenda tied to the implementation of the constitution. It should have been treated as a main priority, but unfortunately, that hasn’t happened.”
Dr. Sharad Onta, a professor, concurs, stating, “The recent amendment to the Insurance Act focuses more on administrative matters than policy issues. The amendment was unnecessary.”
Given that health insurance is a state-run program that directly impacts the rights of citizens, Dr. Onta argues that it should be mandatory, not optional.
He argues that many aspects of the existing Act could have been implemented effectively without the need for changes. If these provisions aren’t executed, new laws will not solve the issue.
Addressing inequality in premiums
Dr. Onta also suggests that the premiums should be adjusted based on the financial status of the beneficiaries, rather than setting a fixed amount for all.
While some citizens, particularly those below the poverty line, have received discounts, this system does not address the needs of economically successful citizens who still struggle to access healthcare.
He proposes that the discount system should be funded by the premiums raised for the program, rather than relying on public funds.
Additionally, Dr. Onta advocates for a system that uses premium funds to cover health insurance management expenses.
If the current premiums are insufficient, he suggests increasing the fee, but in a manner that ensures fairness—higher premiums for those who can afford to pay and lower premiums for those who cannot.
He believes such changes should have been included in the amended act.
The need for a more inclusive and mandatory system
Given that health insurance is a state-run program that directly impacts the rights of citizens, Dr. Onta argues that it should be mandatory, not optional.
“How can health insurance remain relevant when even basic health services outlined in the constitution are not being effectively utilized?” he asks.
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