Social Health Security (Health Insurance) Program in Nepal

The Social Health Security Program (SHSP) is a social protection program of the Government of Nepal that aims to enable its citizens to access quality health care services without placing a financial burden on them. The households, communities and government are directly involved in this program. SHSP helps prevent people from falling into poverty due to health care costs i.e. catastrophic expenditure due to accidents or disease by combining prepayment and risk pooling with mutual support. This program also advocates towards quality health services. This program attempts to address barriers in health service utilization and ensure equity and access of poor and disadvantaged groups as a means to achieve Universal Health Coverage.

Historical Background

An early initiative to health insurance in Nepal began from 1976 through United Mission to Nepal (UMN) as Lalitpur Medical Insurance Scheme in Ashrang, which was later expanded to other facilities. The government funded community-based health insurance program was initiated in 2003 in two districts and expanded to additional four districts in 2005/06. National Health Insurance Policy was passed by Government of Nepal in 2014. In 9th Feb 2015, the ordinance for formation of Social Health Security Development Committee was passed by Government of Nepal and published in the Nepal Gazette. In FY 2071/72, the Government of Nepal had announced to roll out SHSP to three districts (Kailai, Baglung and Illam) but the enrollment process at Kailali was started only from 25 Chaitra 2072 (07 April 2016) and at Baglung and Ilam from 15 Asar 2073(29 June 2016). SHS program hopes to provide an important contribution for helping Nepal shift from the list of Least Developed Countries to Middle Income Developing Countries by the end of 2022. The Social Health Security Development Committee aims to expand this program to all districts by 2020.

Need for Social Health Security (Health Insurance) Program

Social Health Security (Health Insurance) Program is needed to improve the health situation of the people of Nepal. Specifically, this program is needed to;

• increase accessibility to, and equity in, the provision of health care services by removing financial barriers to the use of health care services, focusing on the poor and marginalized;
• promote pre-payment and risk pooling mechanisms to mobilize financial resources for health in an equitable manner;
• encourage output-oriented expenditure in the health sector and improve the effectiveness, efficiency, accountability and quality of care in the delivery of health care services;
• strengthen health systems in an integrated manner; and
• improve the health seeking behaviour of the public through clear entitlement procedures, awareness raising and behaviour change communication.

Long-Term Goal

• The long term goal is to improve the overall health status of Nepalese Citizens.

Objectives

Main Objective

• To ensure Universal Health Coverage by increasing access to, and utilization of necessary quality health services.

Specific objectives

• To increase the financial protection of the public by promoting pre-payment and risk pooling in the health sector;
• To mobilize financial resources in an equitable manner; and
• To improve the effectiveness, efficiency, accountability and quality of care in the delivery of health care services.

Strategies

• Increasing participation of communities towards health insurance program by providing special protection to the poor and marginalized and
• Extending coordination and cooperation with government and nongovernment service provider health institutions for gradual expansion of health insurance program throughout the country.

Key Features 

Following are the key features of Social Health Security Program as provisioned in the Social Health Security Program Standard Operation Procedure (SOP)/Rule 2014

• It is a voluntary program based on family contributions.
• It provides subsidized rates for families whose members have a poverty identity card.
• Enrollment continues throughout the year in implemented districts.
• Insurees have to renew their membership through annual contributions.
• Insurees have to choose their first service point but can also access services from government PHCCs and hospitals and listed private hospitals.
• Insurees can access specialized services elsewhere that are not available at the first service point on production of a referral slip from their first contact point.
• It is cash-less system for members seeking health services. Upon presenting their SHSP membership ID card at a health facility, members are able to receive the health services and drugs covered by the benefit package without having to pay at any stage.
• For emergencies, insurees can access services from any service point without a referral slip.
• The program is IT-based with enrollment assistants using smartphones.
• Purchaser-Provider Split: SHSDC acts as the service purchaser while government and listed private hospitals provide the services.

Contribution Amount

• NPR 3,500 (35 USD) per year for a family up to 5 members.
• NPR 700 (7 USD) for every additional family member.
• 2% payroll contribution for formal sector.
• 100% subsidy for families of  ultra poor, HIV, MDR-TB, Leprosy, severe disability patients etc.
• 100% subsidy for elderly population above 70 years

Benefit Package

• Promotive, Preventive and Curative services §Outpatient, inpatient and emergency care.
• Public and private health facilities §Benefit ceiling NPR 100,000 (1000 USD) per year per family of up to 5 members.
• With an extra NPR 20,000 (200 USD) for each additional member [up to a total of NPR 200,000 (2000 USD)].
• Additional NPR 100,000 (1000 USD) for each elderly population.
• Additional NPR 100,000 (1000 USD) for patient with eight chronic diseases  

Policy Provision 

Constitution of Nepal 2014

In ‘Part Three: Fundamental Rights and Duties’

– Article 35 has provision for right to free basic health services under which following provisions have been made

• Every citizen shall have the right to free basic health services from the State, and no one shall be deprived of emergency health services
• Every person shall have the right to get information about his or her medical treatment.
• Every citizen shall have equal access to health services.

– Article 43 has provision of Right to Social Security under which following provisions are made

• The indigent citizens, incapacitated and helpless citizens, helpless single women, citizens with disabilities, children, citizens who cannot take care themselves and citizens belonging to the tribes on the verge of extinction shall have the right to social security, in accordance with law.

In ‘Part 4: Directive Principles, Policies, and Responsibilities of the State’

• The point no. 15 included in the ‘policies relating to basic needs of the citizens [part 4-51(h)] under policies of the state ensures access to medical treatment while ensuring citizen’s health insurance.

Health Insurance Act 2017

• A Health Insurance bill was approved by the parliament on 10 October 2017 (24 Ashwin 2074 B.S).
• This act makes provisions for enrollment of government employees and families of foreign employment into health insurance program.
• According to the act, the responsibility for enrolling children, elderly and differently abled persons are entrusted to their respective parents or caretakers.
• Families are considered as the unit for enrollment into health insurance program.

National Health Policy 2014

This policy states that

• In order to ensure delivery of an accessible health service by making financial management sustainable, a nationwide insurance policy will be implemented by making law and implementation guidelines. Those who are unable and financially poor will be provided subsidies.
• As a fundamental right of citizens, provision for obtaining quality health care will be ensured.
• In order to ensure the health services provisioned by the state is accessible to poor, marginalized and vulnerable communities; based on equality and social justice, programs will be designed and implemented accordingly.
• Resources obtained from internal and external agencies will be mobilized for effective implementation of this policy and the programs formulated under this policy.

National Health Insurance Policy 2014

• National Health Insurance Policy 2014 was implemented after endorsement by cabinet decision of 25th April 2014 of GoN. The main objective of this policy is to ensure universal health coverage by increasing access to, and utilization of, necessary quality health services.

Ordinance for formation of Social Health Security Development Committee 2015

• Social Health Security Development Committee (SHSDC) is established to provide Health security coverage and ensure access, utilization of quality health services at an affordable cost for all citizens of Nepal. SHSDC is formed under Development Act, 2013 BS (1958 A.D.) and published in Nepal gazette in 09 February 2015.

Social Health Security Program Operating Rule, 2015

• As per the ordinance for formation of Social Health Security Program, to operationalize the Social Health Security Program, cabinet endorsed Standard Operating Procedure (SOP) on 18th Sept 2015.It provides basis for the operation of the Social Health Security Program.

Nepal Health Sector Strategy (NHSS 2015 – 2020)

Nepal Health Sector Strategy (2015-20) states that:

“In order to move towards UHC, NHSS lays out the necessary service delivery arrangements. It calls for basic health services, which is delivered free of charge to the citizens, and defines the Basic Health Package. Services that are beyond the scope of basic health package are delivered through different social health protection arrangements, including health insurance”.

Sustainable Development Goals

• Sustainable Development Goal aims to achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all by 2030.
• It also aims to implement nationally appropriate social protection systems and measures for all, by 2030 achieve substantial coverage of the poor and the vulnerable.

Guidelines for Selection of Enrollment Assistants (Second Amendment), 2074 BS

• Provisions in the Guidelines for selection of enrollment assistants of Social Health Security (Health Insurance) Program (Second Amendment, 2074).

SOURCE OF INFORMATION: 

• Annual Report FY 2073/74 (2016/17) Social Health Security Program 

Recommended reading

• Health Insurance Packages of Non-life Insurance Companies in Nepal
• COVID-19 Insurance Scheme in Nepal (CORONA Insurance)
• Social Health Security (Health Insurance) Program in Nepal
• Medical Treatment of Deprived Citizens (Bipanna Nagarik Kosh), MoHP