Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s national health insurance program is facing mounting financial stress as service utilization surges to record levels, with more than 12.5 million hospital visits made by insured citizens in the last fiscal year alone. Despite rapidly growing demand, the Health Insurance Board (HIB) is struggling to reimburse hospitals on time due to a severe resource crunch, putting the country’s flagship social protection scheme at risk.
Health Insurance Board Executive Director Raghuraj Kafle said that, on average, each insured person visited hospitals five times last fiscal year, while 2.5 million individuals used the service only once. The sharp rise in service demand, he noted, reflects both growing public reliance on the program and systemic stresses in financing.
Kafle said coverage expansion remains a priority. “We are working to bring more citizens under the insurance net and improving the Health Insurance Act, 2074,” he stated at an event organized by the Board. He added that preparations are underway to revise treatment package rates and conduct a nationwide campaign to inform citizens about available health services.
However, Kafle admitted that the Board is facing a critical funding gap that has delayed payments to hospitals. Strengthening the insurance fund, he said, is essential to ensure uninterrupted and quality service delivery.
Experts warn that the program’s long-term sustainability is now under threat.
Dhulikhel Hospital’s Dr. Balaram Malla urged the Board to focus on improving service quality. “If insured patients do not receive quality treatment, their trust will erode and the insurance program cannot be effective,” he said. He added that payment delays from the Board have also burdened hospitals, undermining service delivery.
HIB member Dr. Muktiram Shrestha highlighted a structural imbalance in the program’s finances. While the Board raises nearly Rs 4 billion annually in premiums, it must pay Rs 14 billion to hospitals. “Every year, nearly Rs 10 billion in payouts stretches the insurance system beyond its capacity,” he said.
Shrestha added that Nepal’s healthcare access remains uneven. Over 60 percent of health facilities are concentrated in urban areas, while only 15–20 percent are located in rural regions, where 60–65 percent of the population lives. Because of this, many rural citizens are compelled to travel to urban hospitals for treatment, further straining facilities.
He stressed that the first point of care under the insurance scheme must be strengthened through coordination with local governments. “The intention is to resolve most cases at the primary level itself,” he said.
Stakeholders agree that unless the insurance fund is fortified, payments are streamlined, and service delivery is improved at the primary level, Nepal’s health insurance program may face widening crisis despite record-high enrollment and utilization.
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