Kathmandu, Feb 14: Nepal’s national health insurance scheme is once again in turmoil. What was launched with promise now resembles a chronic illness, flaring up every fiscal year with no lasting cure in sight.
The crisis resurfaced after major public hospitals such as Tribhuvan University Teaching Hospital and Shahid Gangalal National Heart Centre announced a halt to insurance services, citing unpaid dues. Soon after, the Health Insurance Board capped outpatient, OPD, coverage at Rs 25,000 out of the Rs 100,000 annual ceiling. These steps exposed deeper structural problems.
By mid-January, unpaid claims had reached Rs 19 billion. No claims filed since mid-October have been cleared, and more than half of earlier claims remain unsettled. The scheme, piloted in 2016 and later expanded after health was enshrined as a fundamental right in the Constitution, now faces a widening gap between income and expenditure.
The math is blunt. The government provides Rs 10 billion annually, and premiums bring in about Rs 3.5 billion. Total income hovers around Rs 13.5 billion. Yet projected annual payouts approach Rs 29 billion. That leaves a gap of nearly Rs 15 billion each year, pushing liabilities forward.
The imbalance stems from adverse selection and weak contribution compliance. Around 55 percent of enrolled citizens do not pay premiums, as the state covers senior citizens and other targeted groups but fails to reimburse the Board fully. Among those who do pay, most renew only after falling ill. Data show 92 percent of paying members use services, undermining the basic insurance principle of pooling risk across healthy and sick populations.
Abuse and overuse compound the problem. Patients push for unnecessary tests, and some providers inflate claims. The Board says about 20 percent of claims are rejected due to irregularities.
Attempts to rein in spending have had limited impact. A co-payment rule now requires patients to bear 10 percent of costs in public hospitals and 20 percent in private ones. Referral rules have tightened. The latest move split the Rs 100,000 ceiling, limiting OPD and medicines to Rs 25,000 while reserving the rest for inpatient and critical care. But since 80 percent of beneficiaries spend below Rs 25,000, savings remain marginal.
Officials now admit the scheme cannot survive without reform. Proposed fixes include mandatory enrollment of formal sector workers, which could raise up to Rs 10 billion annually, revising premium rates, merging scattered health funds into a single pool, and earmarking part of taxes on tobacco and alcohol for insurance financing.
Nepal spends about 5.5 percent of its economy on health. The insurance program was meant to shield citizens from catastrophic costs. Without financial discipline and political will, it risks becoming a permanent burden instead of a safety net.
.People’s News Monitoring Service
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