Nearly a decade after the introduction of the National Health Insurance Act, the National Health Insurance Program is facing severe operational and financial challenges, prompting the government to announce sweeping reforms aimed at ensuring its sustainability and effectiveness.
Enacted in 2017, the National Health Insurance Act was led by then Health Minister Gagan Thapa with the goal of making healthcare more accessible, affordable and equitable.
Under the scheme, a family of five was entitled to receive up to Rs 50,000 in medical services annually after paying a yearly premium of Rs 2,500. The programme was initially launched in 36 districts.
However, the insurance program is now at a critical stage. Poor management, inadequate infrastructure and a shortage of skilled human resources have significantly hampered service delivery.
Technical inefficiencies and a lack of proper resource allocation have also contributed to the growing crisis within the Health Insurance Board (HIB).
According to White Paper published by the HIB a few months ago, the board has an estimated Rs 24bn in unpaid claims, including Rs 17.5bn in dues from 2023-24. It also revealed that as of February, around 9m insurance claims had yet to be reviewed—highlighting the severe shortage of qualified staff and ineffective claim processing systems.
Moreover, the removal of the first service point, the designated government health institution where insured individuals first seek treatment, from many hospitals has drawn criticism. Several hospitals and local representatives have urged the government to reinstate this service, citing disruptions in care access and dissatisfaction among the insured public. Recently, HIB has notified that the service can be availed through 391 health offices throughout Nepal.
Government hospitals previously reported that over 90 percent of patients are receiving treatment through the insurance scheme, indicating heavy reliance on subsidized care. In contrast, paying outpatient department (OPD) numbers remain low, raising concerns about the program’s financial sustainability.
Health and Population Minister Pradip Paudel has announced plans to expand the program’s coverage. Speaking to Annapurna Post, sister publication of ApEx, he said the government has increased insurance coverage from
Rs 100,000 to Rs 200,000, with a long-term goal of reaching Rs 500,000. He also committed to enhancing benefits for the poor citizens, promising treatment coverage up to Rs 900,000 under the scheme.
While acknowledging the program’s funding gap, Paudel noted that the government has increased its allocation from Rs 7.5bn to Rs 10bn this fiscal year. “We are aware this is still not enough, but we are committed to improving the system,” he said.
In the budget speech for the fiscal year 2025–26, Finance Minister Bishnu Paudel announced a comprehensive restructuring of the national health insurance scheme. Key reforms will focus on enforcing the Health Insurance Act more rigorously, improving institutional discipline, reducing financial leakages, and enhancing service delivery.
Minister Pradip Paudel emphasized the need to create a system where all citizens are covered by health insurance, with contributions collected from salaried individuals. He suggested that 70 percent of healthcare costs could be funded through these contributions, with the state covering the remaining 30 percent.
He stated that effective resource management in the health sector begins with health insurance.
Despite the implementation of several measures, he proposed that a fixed percentage of the state’s income could be allocated specifically for health insurance. If that allocation proves insufficient, additional methods—such as an annual health insurance lottery—could be introduced to generate funds.
He acknowledged that the state’s resources alone are not adequate. However, he asserted that there are numerous ways to raise funds if there is the political will to do so.
Raghuraj Kaphle, Executive Director of the Health Insurance Board, stated that there is a lack of commitment to making the Board effective, warning that the health insurance system is at risk of collapsing if resources are not balanced. He explained that funding for health insurance comes from both the government and insured individuals, with Rs. 3.5bn currently being collected from the insured.
Kaphle emphasized the need to enhance the Board’s institutional capacity. He attributed the collapse of the health insurance system to a shortage of skilled human resources, inadequate technology, and financial instability. Kafle pointed out that while over 50 percent of people receive free healthcare services, only 46 percent actually pay insurance premiums. “Most of those who use the services are chronically ill or patients with serious health conditions,” he added.
The government also plans to integrate multiple public health initiatives into the insurance program to streamline resources and improve efficiency. Benefit caps for insured families are set to gradually increase to ensure broader coverage and better health outcomes.
As the National Health Insurance Program approaches its 10-year mark, it stands at a crossroads. While its original vision remains relevant—ensuring accessible healthcare for all—serious systemic reforms and investments are urgently needed. Without these, the program risks becoming unsustainable, failing the millions of citizens who rely on it for essential medical care.
