Health Insurance as a Means of Financial Protection in Nepal

Sanjiv Kumar Singh
lecturer, Central Department of Library and Information Science, T.U., biomedical technician, Civil Service Hospital,

Abstract :
This article delves into the history, development, health insurance board, its benefits, disadvantages, targeted populations, beneficiary lists, hospitals and services covered, and the associated provisions with health insurance in Nepal. Health Insurance Board (HIB) is a vital social protection initiative by the Nepalese government aimed at granting citizens access to quality healthcare without financial strain. It actively involves households, communities, and government stakeholders. HIB’s primary objective is to prevent individuals from falling into poverty due to high healthcare expenses and to achieve Universal Health Coverage. The program combines prepayment and risk pooling while focusing on delivering high-quality healthcare services and promoting equity among vulnerable groups. There are 440 healthcare institutions across provinces in Nepal, offering primary healthcare, Nagar hospitals, eye hospitals, and District hospitals. Kailali district pioneered first in health insurance registration, and as of fiscal year 2077/078, health insurance covered the entire district. The program enrolled 5,967,408 people in 1,832,105 families, with 2,427,089 active policyholders till the last fiscal year. Recently, extended health insurance has been tried to cover the prisoners and detainees. The Government of Nepal aspires to achieve Universal Health Coverage by 2030, addressing healthcare financing challenges through the Health Insurance Act (HIA) enacted. The HI program, initially launched as Social Health Security (SHS) in 2016, was piloted in Kailali, Baglung, and Ilam Districts. Health insurance programs in Nepal cater to diverse populations and involve varying costs based on coverage type, health status, family size and provider.
Introduction :
Health insurance plays a crucial role in providing financial security and access to healthcare services (Pitacco, 2014). In Nepal, the healthcare landscape has evolved significantly in recent years, with the introduction, implementation and growth of health insurance programs by the Health Insurance Board (HIB). The impacts of health insurance lie on an individual’s health insurance status which is often influenced by several factors that affect their health. Consequently, disparities in health outcomes between insured and uninsured individuals could result from differences in insurance coverage or other unobservable distinctions between these two groups. Moreover, a person’s health status
can directly influence their ability to obtain insurance coverage. In econometric terms the issue at hand is that health insurance serves as an endogenous variable. Research studies differ in how effectively they acknowledge and tackle this endogeneity concen
(Levy & Meltzer, 2008).
History of Health Insurance in Nepal :
The shaping of health policy in Nepal has been significantly impacted by the Alma Ata declaration of 1978, which underscores the importance of community-based preventive promotive and curative healthcare services (Cueto, 2004). This influence is evident in
the establishment of a comprehensive network of primary healthcare facilities and the deployment of community health workers tasked with delivering essential health services directly within local communities (Mishra, Khanal, Karki, Kallestrup, & Enemark, 2015), Health insurance in Nepal has its roots in the early 1990s when the government initiated discussions on the need for a health insurance program. Its blueprint is traced back to 1994 when the government launched the “Indigent Patient Fund” to assist impoverished individuals in accessing healthcare services. Over time, various health insurance schemes and programs were introduced to address the healthcare needs of different segments of the population.
In 2016, the Government of Nepal launched the family-based health insurance program as a strategic initiative aimed at achieving several critical healthcare objectives. The primary goal was to enhance financial protection for the citizens of Nepal while simultaneously improving their access to essential healthcare services. The introduction of this program marked a significant step towards addressing longstanding challenges in the country’s healthcare system. Nepal has been grappling with issues related to out-of-pocket healthcare expenses, which often led to financial hardship for families. This program sought to alleviate this burden by promoting the concept of health insurance at the family level (Ghimire, Ghimire, Khanal, Sagtani, & Paudel, 2023).
Development of Health Insurance Programs :
Health insurance in Nepal has seen significant growth through various initiatives. Firstly, Community-based Health Insurance (CBHI) schemes, such as the Micro-Health Insurance Program initiated by MoHP in 2003/04 from Nawalparasi and Morang districts. Secondly the government-led Social Health Security Program (SHSP), launched in 2016, aims to provide health insurance coverage to all Nepali citizens and encompasses various programs like the Prime Minister’s Rural Development Program and the School Health and Nutrition Program. Lastly, the private sector has played a substantial role in this development, with numerous private insurance companies offering health insurance policies to individuals and families, often providing more extensive coverage additional benefits and reducing the massive economic burden to the health victims These diverse initiatives collectively contribute to improving healthcare accessibility and

can directly influence their ability to obtain insurance coverage. In econometric tem studies differ in how effectively they acknowledge and tackle this endogeneity c the issue at hand is that health insurance serves as an endogenous variable. Resear
(Levy & Meltzer, 2008).
History of Health Insurance in Nepal :

The shaping of health policy in Nepal has been significantly impacted by the Alma A promotive, and curative healthcare services (Cueto, 2004). This influence is evident declaration of 1978, which underscores the importance of community-based preventive the establishment of a comprehensive network of primary healthcare facilities and the deployment of community health workers tasked with delivering essential health services directly within local communities (Mishra, Khanal, Karki, Kallestrup, & Enemark, 2015) Health insurance in Nepal has its roots in the early 1990s when the government initiated discussions on the need for a health insurance program. Its blueprint is traced back to 1994 when the government launched the “Indigent Patient Fund” to assist impoverished individuals in accessing healthcare services. Over time, various health insurance schemes and programs were introduced to address the healthcare needs of different segments of the population.
In 2016, the Government of Nepal launched the family-based health insurance program a strategic initiative aimed at achieving several critical healthcare objectives. The primary goal was to enhance financial protection for the citizens of Nepal while simultaneously improving their access to essential healthcare services. The introduction of this program marked a significant step towards addressing longstanding challenges in the country’s healthcare system. Nepal has been grappling with issues related to out-of-pocket healthcare expenses, which often led to financial hardship for families. This program sought to alleviate this burden by promoting the concept of health insurance at the family level (Ghimire, Ghimire, Khanal, Sagtani, & Paudel, 2023).
Development of Health Insurance Programs :
Health insurance in Nepal has seen significant growth through various initiatives. Firstly, Community-based Health Insurance (CBHI) schemes, such as the Micro-Health Insurance Program initiated by MoHP in 2003/04 from Nawalparasi and Morang districts. Secondly the government-led Social Health Security Program (SHSP), launched in 2016, aims to provide health insurance coverage to all Nepali citizens and encompasses various programs like the Prime Minister’s Rural Development Program and the School Health and Nutrition Program. Lastly, the private sector has played a substantial role in this development, with numerous private insurance companies offering health insurance policies to individuals and families, often providing more extensive coverage and additional benefits and reducing the massive economic burden to the health victims These diverse initiatives collectively contribute to improving healthcare accessibility and financial protection for the Nepalese population. Health Insurance Board (HIB) HIB is a key social protection initiative by the Nepalese government, aimed at granting households, communities, and government stakeholders.

The program’s primary goal is citizens access to quality healthcare without financial strain. It actively engages to prevent individuals from falling into poverty due to high healthcare expenses caused by accidents or illnesses. It achieves this by combining prepayment and risk pooling, fostering mutual support. Moreover, the program emphasizes the delivery of high-quality healthcare services while addressing barriers to healthcare access and promoting equity among vulnerable and disadvantaged groups. In doing so, it strives to achieve Universal Health Coverage. Over the years, various studies and sector assessments have highlighted the urgent need to reduce out-of-pocket spending, which is considered an inequitable and regressive method of financing healthcare services. The main objective is to achieve Universal Health Coverage by enhancing access to and utilization of essential high- quality healthcare services, with specific aims including promoting pre-payment and risk pooling for enhanced financial protection, equitably mobilizing financial resources, and enhancing the effectiveness, efficiency, accountability, and quality of healthcare delivery (Health Insurance Board, Nepal Government, 2023). Enhancing community involvement in health insurance, especially for the underprivileged, and fostering collaboration with both government and non-government healthcare providers to gradually expand the program nationwide is the strategic goal and responsibility of the Health Insurance Board of Nepal. It is operated and governed by the Health Insurance Board Regulation 2075 and the Health Insurance Act, 2074, with its central office located in Teku, Kathmandu. There are 440 healthcare institutions distributed across different provinces in Nepal, specifically, 107 in Koshi Province, 56 in Madhesh Province, 100 in Bagmati Province, 55 in Gandaki Province, 57 in Lumbini Province, 33 in Karnali Province, and 32 in Sudurpashchim Province. These institutions collectively aim to provide healthcare services to policyholders who have actively participated in and acquired health insurance coverage (Health Insurance Board, 2023). The healthcare institutions mentioned encompass primary healthcare care (PHC), in addition to Nagar hospitals, eye hospitals and District hospitals, collectively serving as the backbone of the health insurance system. Kailali district pioneered and became the first district to open health insurance registration on 25th Chaitra, 2072, and health insurance services commenced from 1st Jestha, 2073 (Health Insurance Board, 2078). In the fiscal year 2077/078, health insurance was covered all over Nepal. Basaula (2080) the annual report reveals that the total enrolled population surged to 5,967,408, encompassing a total of 1,832,105 enrolled families. Within this robust enrolment, 2,427,089 individuals actively utilize their policies. While this program has expanded to encompass all districts, it’s worth noting that the number of enrolled individuals from the general population falls short when compared to the target audience. Koshi Province stands out as the highest achiever, successfully reaching 42% of
its enrollment target. Conversely, Madhesh Province exhibited lower performance, w
only 7.5% of the targeted population enrolled reaching.
Provision of Health Insurance :
Article 51 of Nepal’s Constitution outlines the framework for healthcare accessibility Insurance Act, 2074, extends health insurance coverage to dependents residing in including health insurance for citizens. Sub-section 3 of section (3) within the Heal nursing homes, orphanages, and children’s correctional facilities, among others (Health Insurance Board, 2075). Recognizing the opportunity to include prisoners and detainees in the insurance program, the (HIB) has initiated this process, leveraging the authority granted by Section 41 of the Health Insurance Act, 2074 (Nepal Government, 2074, p 16). This helps to implement the procedures for connecting prisoners and detainees to the health insurance program 2079. An amount of 3500 rupees is allocated for family under the health insurance scheme for the procedures for connecting prisoners and detainees. Here, “family” is defined as the individual and the members living together
in a cell (Health Insurance Board, 2079, p. 2).
The Government of Nepal is committed to achieving Universal Health Coverage (UHC) by 2030, a critical target under Sustainable Development Goal 3 for good health and well-being. Additionally, Nepal’s Constitution recognizes access to basic health services as a fundamental right for its citizens. However, the allocation of less than 3% of the total budget to the health sector is deemed insufficient to meet global health and well- being goals and constitutional healthcare rights. Therefore, securing appropriate and sustainable healthcare financing becomes imperative to align with these targets and agendas.
To address this challenge, the Government of Nepal enacted the Health Insurance Act (HIA) in 2017, aiming to establish financial sustainability for healthcare. The Health Insurance (HI) program, initially introduced as Social Health Security (SHS) in 2016, was piloted in Kailali, Baglung, and Ilam Districts under the provisions of the Development Board Act of 1956 in its initial phase. This initiative signifies Nepal’s proactive steps towards achieving comprehensive and accessible healthcare for its citizens (Acharya, Devkota, Gautam, & Bhattarai, 2020). Health insurance programs in Nepal target a range of populations, including vulnerable and Low-Income groups, Students, Working Professionals, prisoners and detainees in jail who are not getting proper health services and many of them are unable to offer them. The cost of health insurance membership in Nepal can differ significantly based on the type of coverage, health status, family size,
local government and provider.
Hospitals and Services Covered :
Hospitals and services covered vary depending on the health insurance program or policy
hospitalization, such as room fees, surgical procedures and medications. Outpatient health coverage. These include inpatient care which covers expenses associated with care is common coverage for doctor’s visits, diagnostic tests and prescription drugs. services cover ambulance transportation and emergency medical treatment in case of Maternity care is often included to help expectant mothers during pregnancy. Emergency an emergency. All of these services are included to provide comprehensive healthcare coverage to insured individuals and their families in Nepal.
Benefits of Health Insurance in Nepal :
It facilitates access to healthcare services, ensuring that individuals can obtain medical treatment when required, thereby minimizing financial obstacles that might deter them from seeking care. Further provides a crucial safety net by covering medical expenses, alleviating the financial strain on families during periods of illness or emergencies. Moreover, certain health insurance programs extend coverage to preventive services and health check-ups, encouraging early disease detection and management. This emphasis on preventive care underscores the significance of proactive healthcare measures in maintaining overall well-being. An extra benefit of up to one lakh rupees is allocated specifically for certain critical medical conditions. These conditions encompass a range of serious health issues, including but not limited to cancer, heart disease, kidney disease, head injuries, spinal injuries, sickle-cell anemia, Parkinson’s disease, and Alzheimer’s disease (Health Insurance Board, 2075, p. 21). The purpose of this additional benefit is to provide substantial financial support to individuals who are diagnosed with these particular illnesses, helping them cope with the high costs of medical treatment, care, and related expenses. It serves as a crucial safety net, ensuring that those facing these challenging health conditions can access the necessary resources to manage their medical needs effectively and maintain a reasonable quality of life. This provision underscores the government’s commitment to addressing the financial burden associated with severe illnesses, promoting health equity, and ensuring that individuals receive appropriate care and support during their healthcare journey.
Healthcare provisions are subject to specific limitations, including an annual cap on certain medical items and procedures. For instance, the program restricts the distribution of healthcare materials within a given year, allowing for a maximum of 1000 pairs of eyeglasses, 5000 hearing aids, 1000 white canes for the visually impaired, and crutches valued at 2500 rupees. These limitations are established to ensure the prudent allocation of resources and prevent excessive utilization (Health Insurance Board, 2074, p. 60). Furthermore, the program excludes plastic and cosmetic surgery from coverage, except in cases of burns, severe abnormalities, or injuries to the lip and skull. This means that individuals seeking plastic or cosmetic procedures unrelated to these specific conditions would not receive financial assistance for such treatments. Except for dental abscesses and the primary care therapy of oral injuries, dental treatment services are typically not covered by the programme. This discriminating strategy aims to concentrate resources on
the most pressing healthcare needs while preserving a reliable and effective healthcare system. It makes sure that funds are largely allocated to treating serious medical illnesses
and assisting people in efficiently managing their health.
Disadvantages and Challenges :
is weak, with a considerable dropout rate and poor renewal. Patient management Paneru et al. (2022) have concluded that “Although enrollment is encouraging, adherence strategies and insurance education are recommended urgently. Furthermore, alternate schemes and strategies may be considered”. Thus government need to use proper methods of disseminating information and at the same time needs to improve the quality of health services provided in the Health Insurance Policy. There are limitations in coverage; despite advancements, health insurance may not encompass all medical expenses, which can result in individuals incurring out-of-pocket costs. Further, there are disparities in the availability and quality of healthcare facilities across different regions, affecting the overall effectiveness of health insurance programs. Lastly, there is a substantial awareness and enrollment gap, with many eligible individuals, particularly in rural areas, remaining unaware of the existence of health insurance programs, leading to low enrollment rates. These factors collectively underscore the need for continued efforts to enhance healthcare coverage and awareness in Nepal.
Conclusion :
Health insurance in Nepal has evolved over the years, aiming to provide financial protection and access to healthcare services for a diverse range of beneficiaries. While these programs have made significant strides in improving healthcare accessibility, challenges such as limited coverage and healthcare infrastructure disparities remain. Increasing awareness, expanding coverage, and enhancing the quality of healthcare services are critical steps in ensuring that health insurance continues to benefit the people of Nepal. It helps to implement the procedures for connecting prisoners and detainees, low-income families, and differently able individuals for easy and convenient health services. It’s a great tool that serves to fight against the financial protection of the citizens of Nepal.
References :
Acharya, D., Devkota, B., Gautam, K., & Bhattarai, R. (2020). Association insurance: A case of Nepal. Archives of Public Health, 78(1), 135. https://doi.of information, education, and communication with enrolment in health
org/10.1186/s13690-020-00518-8
Basaula, D. (2080). Brief Annual Progress Report for FY 2078/079. https://mohp.gov.np/uploads/articles/Health%20Insurance%20Board.pdf KTM: Health Insurance Board. Retrieved from Health Insurance Board website: Cueto, M. (2004). The origins of primary health care and selective primary
health care. American Journal of Public Health, 94(11), 1864-1874. https://doi.
org/10.2105/AJPH.94.11.1864