Government Health Insurance and Financial Protection in Nepal: A Systematic Literature Review of the National Health Insurance Program

Abstract

Background: Financial protection is among the components of universal health coverage as it can have financial implications for a household in case of ill health. In 2016, the National Health Insurance Program (NHIP) was introduced in Nepal, which is a government program aimed at ensuring easier access to healthcare services and reduced financial costs of utilizing such services. However, there are several critical aspects related to enrollment, accessibility, renewal of membership in the scheme, use of services, and financial costs that need to be addressed.

Objective: The objective of the current systematic literature review is to analyze the current situation regarding government health insurance in Nepal and examine the issues related to enrollment, utilization, dropout, satisfaction with the services, out-of-pocket expenditures, catastrophic health expenditures, and financial protection.

Methodology: The systematic literature review was performed via analysis of scholarly articles dedicated to the NHIP and healthcare financing in Nepal. The selected articles were those written in 2021–2026 as the primary sources of data. Other papers published during the previous period served as the secondary sources of information used to provide background data and baseline evidence.

Results: It can be concluded based on the reviewed literature that NHIP has helped to enhance the institutional base of government health insurance in Nepal; however, there are some constraints to the effectiveness of the program in terms of its function of providing financial protection, namely partial coverage, inequitable enrollment, drop-outs, lack of awareness, availability of services, administrative issues, and dissatisfaction with some aspects of service delivery. According to the evidence provided by national surveys, the coverage of government health insurance in Nepal is rather low, and there is an inequality in enrolment depending on the place of residence and socio-economic status. Additionally, the evidence provided by the studies in Bhaktapur and Lumbini shows that utilization and sustainability of health insurance are affected by health needs, chronic conditions, willingness to continue enrolment, service quality, administrative process, restriction of benefits, and information. Moreover, according to the recent literature, people with health insurance feel that their financial burden has decreased, although there are some problems with regards to availability of services and insurance awareness. Despite the nationwide researches in health financing, catastrophic and impoverishing health expenditures in Nepal remain high.

Conclusion: Based on the reviewed literature, it can be stated that Nepalese government health insurance system has good chances to improve financial protection; however, mere enrolment should not be considered as sufficient indicator of ensuring effective financial risk protection. Successful implementation of NHIP is dependent on continued enrolment, equity in coverage, appropriate benefit package, availability of medicines and services, efficient claims and referrals, service quality, and protection from out-of-pocket payments. Further longitudinal and nationwide researches will help to measure the impact of NHIP on catastrophic and impoverishing health expenditure.

Novelty: The present literature review considers the evidence from Nepal with regards to enrolment, utilization, drop-out, satisfaction, health expenditure, and financial protection in order to assess the practice of government health insurance program rather than coverage alone.