Government’s health insurance liabilities soar to Rs 16.45 billion

KATHMANDU, APRIL 7: The government’s liability under the national health insurance program has reached Rs 16.45 billion, according to the Health Insurance Board. In a press conference held yesterday, the Board presented a status report highlighting concerns over financial imbalance caused by low revenue and rising costs, threatening the program’s credibility and long-term sustainability.

Dr. Raghuraj Kafle, Executive Director of the Board, stated that the Health Insurance Fund has limited income sources, mainly consisting of contributions from insured individuals and allocations from the Government of Nepal. "No alternative sources of income have been developed so far," he said. “By the mid-March of  2024/25, the Fund had only Rs 1 billion in its account, while pending payments stood at Rs 16.45 billion. The gap between income and expenditure is widening.”

The Board had approved a budget of Rs 26.59 billion for the current fiscal year, but it anticipates receiving only about one-third of that amount.

According to Dr. Kafle, the Board is obligated to pay Rs 23.4 million annually in rent, in addition to increasing payroll expenses for staff salaries, allowances, and registration incentives. “Monthly payments to service providers are rising by approximately Rs 2 billion,” he added. “Administrative costs have also been increasing steadily, widening the financial gap even further.”

Kafle revealed that the Office of the Auditor General reported an unsettled amount of Rs 2.85 billion as of the end of fiscal year 2023/24. This figure represents 75% of the Board's annual internal revenue, which he described as a significant challenge. “Substantial efforts are needed to clear these unsettled accounts,” he said.

He explained that while the average annual premium paid by a family under the scheme is Rs 3,800, the average amount claimed per family stands at Rs 8,350—indicating a clear imbalance between contributions and benefits. “Though service utilization rates appear balanced, overall participation remains uneven,” he noted.

According to available data, in fiscal year 2021/22, 42% of insured individuals in Koshi and Bagmati Provinces accessed health services. The rates were 36% in Gandaki, 34% in Lumbini and Karnali, 26% in Madhesh, and 25% in Sudurpashchim. By 2023/24, the utilization rates had increased to 46% in Koshi, 44% in Bagmati and Gandaki, 39% in Lumbini, 29% in Madhesh, 54% in Karnali, and 40% in Sudurpashchim.

Dr. Kafle stressed that participation in the insurance program remains significantly lower in economically and socially disadvantaged provinces, resulting in lower service usage. He also pointed out that a large portion of the population in those regions is yet to be enrolled in the program.

The health insurance program is currently being implemented in 749 local units across all 77 districts. Since its inception, a total of 8,952,135 individuals have enrolled. As of mid-March of the current FY, there were 5,753,817 active members, representing 20% of Nepal’s population. Of these, 4,302,709 (75%) were regular active members and 1,451,108 (25%) were targeted beneficiaries.

“Looking at the numbers, it’s clear that efforts must be intensified to bring the remaining 80% of the population under coverage,” Dr. Kafle concluded.