40% of Citizens Fail to Renew Health Insurance, 2.5 Billion NPR Debt Under Pressure

Chaitra 25, Kathmandu — The health insurance program, initiated with the goal of providing health services to all citizens without financial hardship, has marked its 10-year anniversary. However, during this decade, the program has been unable to cover all targeted citizens, leaving the goal of universal access to health services unfulfilled.

Concern has grown as the renewal rate among insured citizens has declined in the program designed to alleviate treatment costs.

Speaking at the 10th Health Insurance Day event, Dr. Krishna Prasad Paudel, Executive Director of the Health Insurance Board, acknowledged that while some progress has been made in expanding the program, many challenges remain. He emphasized the need to advance the program in a more effective, technology-friendly, and citizen-centric manner.

The event was attended by Labor Minister Dipak Kumar Sah, the Health Secretary, Additional Health Secretary, representatives from the World Health Organization, Director General of the Health Services Department, board members, heads of various hospitals, and representatives of health partner organizations.

The health insurance program, initiated on Chaitra 25, 2072 (April 8, 2016), in Kailali based on the Social Health Security Development Committee’s concept, has been expanded nationwide. Currently, services are offered through approximately 425 government and private health institutions.

According to Dr. Paudel, around 9.8 million Nepalese citizens are enrolled in the health insurance program, but only 5.9 million remain active insured members.

He reiterated that the program started in Kailali on Chaitra 25, 2072, has spread across the country.

“Only about 60% of all insured individuals are active; 40% have not renewed, raising questions about the sustainability of the program,” he said. Dr. Paudel noted that roughly one-third of the country’s population has been covered by the program to date.

Despite high service utilization rates, premium collections have not been sufficient to cover necessary expenses. The collected premiums cover only about a quarter of total expenditures, he added.

Delays in timely payments to service provider hospitals have become another major challenge for the program. It is estimated that by the end of the current fiscal year, the board’s liabilities, including outstanding dues and expenditures, will exceed 2.5 billion Nepalese Rupees.

Currently, a family must pay an annual premium of three thousand five hundred Nepalese Rupees. However, this amount falls short of covering the actual treatment costs. Board analysis indicates that this contribution accounts for just about 25% of the total expenses.

Dr. Paudel stated that the daily average claim amount is about 80 million NPR, with monthly claims totaling approximately 2.5 billion NPR.

“Many service providers have not received payments for a lengthy period. Some hospitals have even resorted to suspending insurance services,” he remarked. “The current premium rate is inadequate, and revisions based on actuarial analysis are necessary.”

Highlighting the primary objective of the Health Insurance Act—to prevent any Nepalese citizen from being denied health services due to financial constraints—he called for shared responsibility among the government, service providers, and beneficiaries.

Prolonged unpaid claims have led some hospitals to stop offering insurance services altogether.

He explained that the board plans to introduce a one-stop system for various social health security programs, strengthen institutional governance, enhance the use of digital technologies, and expedite the claim payment process in the near future.

Dr. Paudel noted complaints about insurance services being halted in some hospitals.

“Even as we observe Health Insurance Day, complaints about services being stopped or inaccessible in certain hospitals continue. Addressing these problems requires cooperation from all parties,” he said.

He stressed the need for vigilance from both beneficiaries and service providers to prevent misuse of services. Furthermore, preparations are underway to expand digital technology, link the system with the national identification card, and adopt self-enrollment systems.

DURING the program, among approximately 60 participants involved in a video and reels campaign on social media to raise public awareness about the health insurance program, the board awarded prizes to the top three performers.

“There are challenges and problems, but solutions are within reach,” Dr. Paudel said. “With collective effort from all stakeholders, the health insurance program can be further strengthened to provide quality health services to Nepalese citizens.”