Health Insurance Board Runs Out of Budget

The budget allocated to the Health Insurance Board for the current fiscal year (FY 2025/26) has been exhausted in clearing hospitals’ old dues, leaving the Board unable to pay claims incurred since mid-April, raising the risk of disruption to the national health insurance programme.

The government had allocated Rs 10 billion to the Board for the current fiscal year. However, the entire amount was spent on settling liabilities up to mid-April, creating a cash crunch for payments to hospitals currently providing services under the scheme.

“We have formally requested an additional Rs 7 billion through the Ministry of Health and Population to the Ministry of Finance to clear the outstanding liabilities,” said Bikesh Malla, Public Health Officer at the Health Insurance Board. “Since this year’s allocated budget has been fully spent, we had no option but to seek additional funding.”

According to Malla, the Board had outstanding hospital dues of Rs 12 billion from the previous year, which were also cleared using the current fiscal year’s budget. As a result, meeting the liabilities of the current fiscal year has now become difficult.

If the Ministry of Finance releases the requested Rs 7 billion, the Board will be able to clear hospital dues only up to mid-October of the current fiscal year. The Board collects around Rs 3–4 billion annually from insured members, which, Malla said, is insufficient to sustain the programme.

Rising Liabilities

The Board receives hospital claims of around Rs 2 billion every month, amounting to nearly Rs 24 billion annually. However, with the government allocating only Rs 10 billion a year, the Board has been struggling to settle hospital dues on time.

While insurance benefits for citizens have been expanded in recent years, no concrete decision has been made on managing the growing liabilities, Malla said. Under the expanded benefits, coverage for critical illnesses has been increased from Rs 100,000 to Rs 200,000. A total of 512 primary service points have been designated across 382 local levels.

A plan to deduct 2 percent of formal sector employees’ salaries to strengthen the funding base has yet to be implemented. “If the leadership took initiative to implement this provision, managing liabilities would become much easier,” Malla said.

The Board is also preparing to merge the Poor Citizens’ Medicine Programme into the health insurance system to eliminate duplication. Although Rs 7 billion had been allocated to that programme, its budget has also already been exhausted, according to Malla.

Read: Government Brings Poor Citizens’ Treatment Program Under Health Insurance Board