Health Insurance Crisis

The cost of healthcare is among the big-ticket expenditures a person or a family has to make. And this is true universally. When the treatment requires intensive medications for an extended period, the family's financial health plays outsize role in determining the outcome. Examples abound of affluent families going broke after doling out a fortune to pay for the treatment of one of their ailing members. In this context, it is not hard to imagine what would happen to a family living hand to mouth or barely surviving if it had to pool a large sum of money to provide for the treatment of its loved one/s.

In an effort to ease this financial pressure and make quality healthcare accessible to all, the government introduced a Health Insurance Programme (HIP) in 2016. Then in 2017, the Health Insurance Board (HIB) was formed following the enactment of the Nepal Health Insurance Act, which mandates that every Nepali citizen be covered by a social health insurance scheme. 

Since its rollout in three districts, the scheme is now available in all 77 districts of the country. The programme is indispensable to implement the constitutional right to health, which guarantees free basic health services to every citizen. On average, around 50,000 people are said to take services every day, with over 10 million people being covered by health insurance.

However, 10 years into its launch, the programme is still facing its biggest sustainability test. According to a news report carried by this daily the other day, Tribhuvan University Teaching Hospital, which treats the largest number of insured patients and files the biggest volume of insurance claims, has terminated all treatment services under the HIP, citing an inability to sustain operation as it bears a monthly loss of Rs. 20 million. The hospital’s decision came after the HIB approved only 50 per cent of the hospital's insurance claims. 

According to the hospital officials, the Health Insurance Board (HIB) currently owes it more than Rs. 400 million in unpaid dues for the past two years. Making matters worse, many other hospitals have already warned the Board to settle pending payments and have issued ultimatums, threatening it to opt out of the scheme altogether. Should this scheme terminate, it will have a direct bearing on ordinary citizens nationwide, leaving them without access to affordable healthcare.

The HIB, for its part, is known to reject insurance claims for minor issues, such as missing Nepal Medical Council registration numbers on prescriptions or diagnostic tests not matching prescriptions. These rejections have added to hospital revenue loss.  TUTH, on the other hand, argues that the HIB's approved treatment rates are significantly lower than their actual costs, and that the latter's tendency to unilaterally fix and revise rates has put the former under immense financial pressure. To address this crisis, the government must boldly enact evidence-based reforms. If it is an issue of resource crunch, ineffective and costly projects must be terminated, and the resource must be directed to high-impact interventions that benefit patients equitably.

Health insurance promotes overall financial security and well-being for individuals and families, acting as a crucial financial safety net against rising healthcare expenses. It also encourages preventive care, helping to identify issues early and manage chronic diseases effectively. Given its immense importance, we cannot afford to let it fail. The government must leap into action to address the crisis, for investment in health, unlike many other sectors, is highly likely to yield returns.