KATHMANDU: The government has initiated work to streamline the health insurance program, which has been plagued by payment issues and other bottlenecks in the past.

As a first step, the Office of the Prime Minister and Council of Ministers held a discussion today with high-ranking officials from the Ministry of Health and Food Safety, as well as healthcare workers and officials from the provincial and local levels.

The meeting focused on measures to make the insurance program effective, expand its reach to the most vulnerable segments of society, and make the insurance claim settlement process hassle-free.

During the discussion, Minister for Health and Food Safety Nisha Mehta informed that the government is undertaking homework to restructure the health insurance program and ensure it does not become a financial burden on the state.

“We must identify the section of society that needs the health insurance program the most, and homework is currently underway to determine that,” she said.

At the event, Prakriti Dhakal, Personal Under-Secretary at the Office of the Prime Minister and Council of Ministers, presented a summary of the progress made so far in the health insurance sector along with insights from various studies.

According to her, although the health insurance program has run into trouble due to various structural and behavioral issues, there is no alternative to correcting these flaws and moving forward.

Furthermore, she highlighted that the insurance program is currently running an annual deficit of Rs 6.75 billion.

Even though the newly formed government has been releasing insurance clearance amounts immediately, the system faces an ongoing annual loss of Rs 6.57 billion.

She also informed that Rs 16 billion is urgently required to clear the remaining outstanding insurance dues owed to hospitals.

Explaining the reasons behind such losses, she noted that since only sick individuals enroll in the scheme, an adequate risk pool fund fails to accumulate.

The voluntary nature of the insurance program prevents the creation of a robust risk fund, while unnatural and fraudulent claims, inflated billing, duplicate claims, and a lack of honesty between both patients and service providers exacerbate the crisis.

She added that because the insurance premiums collectable cover only 24% of the total claims, the system is forced to endure an annual deficit of Rs 6.75 billion.

According to Health Secretary Dr. Bikash Devkota, out of the total Rs 1.99 billion in claims made during the current fiscal year, only about half—Rs 1.17 billion—has been reimbursed.

This leaves an outstanding liability of Rs 1.11 billion for the current fiscal year alone.

Although the current government has progressively increased the volume of disbursements since taking office, it is continuously working on a structural blueprint to find a long-term solution to this problem.