Health Ministry Seeks Rs 15 Billion to Avert Health Insurance Crisis

The Ministry of Health and Population has sought additional funds of Rs 15 billion to avert a growing financial crisis in the national health insurance programme, warning that services could grind to a halt without immediate budget support.

The Ministry made the request after the Rs 10 billion allocated for the programme in the current fiscal year proved insufficient. Although the Ministry of Finance recently released an additional Rs 1 billion, Health Minister Dr Sudha Gautam said the amount falls far short of what is required to keep the programme operational.

During a discussion held at Singha Durbar on Wednesday in the presence of Prime Minister Sushila Karki, Minister Gautam warned that failure to arrange funds immediately could force the government to suspend the health insurance scheme, leaving large dues unpaid and hospitals enrolled in the programme facing serious financial strain.

She said the crisis cannot be resolved through discussions and recommendations alone and urged the Finance Ministry to ensure proper resource mobilisation.

“How can the health insurance programme function with zero budget while carrying liabilities worth Rs 24 billion?” she asked. “Either the government should clearly decide to shut it down or arrange the required funds.”

Finance Ministry Flags Fiscal Constraints

Finance Secretary Ghanshyam Upadhyay said the Finance Ministry is not in a position to allocate large sums on an ad hoc basis. He proposed temporarily redirecting one month’s senior citizens’ allowance as a possible funding option.

According to him, the government already pays health insurance premiums for around 1.2 million citizens aged 70 and above, while also providing them with a monthly allowance.

“If we convert one month’s senior citizens’ allowance into health insurance premiums, we could mobilise Rs 4–5 billion,” Upadhyay said.

He also pointed out that while providing free services to leprosy patients, people living with HIV and other high-risk groups is justified, extending free health insurance coverage to families of female community health volunteers has added a significant financial burden. Revising that policy could generate an additional Rs 5–6 billion, he said.

Upadhyay criticised what he described as populist decisions taken by the Health Ministry’s political leadership without prior coordination with the Finance Ministry.

“Political decisions are made at will, administrative mechanisms fail to flag the consequences, and when problems escalate, the burden is placed on the Finance Ministry,” he said.

Meanwhile, Minister Gautam, meanwhile, said the Health Ministry has not received the 25 percent share of tobacco tax legally earmarked for the health sector. She said releasing that amount alone could generate Rs 5–6 billion to ease the crisis.

Prime Minister Karki said the government would not allow the programme to collapse, as it provides services to around 1.6 million poor, vulnerable, homeless and marginalised citizens.

“The health insurance programme needs strict regulation,” the Prime Minister said. “If benefits are to be provided to 1.6 million disadvantaged citizens, it must go through a single, well-managed channel. Money is being spent, yet treatment is not reaching the intended beneficiaries. That is unacceptable.”

She said the government is prepared to arrange funds—even through borrowing, if necessary—but stressed that the programme must operate within clear rules and accountability. The Prime Minister said discussions would resume as soon as the Finance Minister returns, and reforms would not be delayed.

National Planning Commission Vice-Chairman Dr Prakash Kumar Shrestha said the health insurance programme requires structural reform. He noted that the government failed to consult insurance regulators adequately while launching such a large scheme, which has contributed to the current crisis.

According to the Health Insurance Board, more than 50,000 claims are submitted daily from health institutions nationwide, but the Board has the capacity to process only 403 claims per day due to manpower shortages. The Board has been operating with temporary staffing for the past 10 years.