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Promoting Uptake of Health Insurance in Nepal

October 3, 2016

Poor people can have trouble accessing quality healthcare and buying the drugs they need to maintain health. Some countries are looking for cost-effective ways to provide universal healthcare coverage through subsidized insurance programs, but even then they struggle to get people to sign up. This evaluation studies whether activities to promote healthcare insurance can increase enrollment, while also providing evidence on whether such programs reduce costs.

Research area: Health and Health Systems

Country: Nepal

Evaluation Sample: 21 households in each of the 300 Village Development Communities

Timeline: 2013 - 2017

Intervention: Subsidized health insurance

Researchers: Tekabe Belay, World Bank; Khabiraj Khanal, Nepal’s Ministry of Health and Population; Manav Batterai, World Bank

Partners: Center for Micro Finance, Institute of Financial Management and ResearchOxford Policy ManagementGovernment of Nepal


Improving the health of poor families requires availability of quality health services and ensuring access and use. Health insurance is a tool that countries often use to make health services more affordable. That of course assumes that health insurance itself is affordable. One approach is to subsidize the cost of insurance to help improve enrollment, but there are questions whether coverage really will make a difference in people’s lives. The evaluation will provide evidence of the impact of providing subsidized health insurance on improving health outcomes and reducing out of pocket expenses on health care. This will give policymakers in other developing countries valuable information for developing and supporting national health insurance plans.


Nepal has seen a sharp rise in out-of-pocket health costs and growing inequality in access to care. Although Nepal has a wide network of public health facilities, only about 50 percent of the poorest Nepalese seek care when they are ill because of problems of access and af­fordability. Essential drugs that are supposed to be provided free are often in short supply, for example, forcing people to pay out of pocket. The Ministry of Health and Population is piloting a new health insurance program that will cover services and essen­tial medicine. SIEF-supported researchers are partnering with the ministry to evaluate whether this insurance lowers out-of-pocket expendi­tures and increases use of health service. The results will be used to inform the scale up of this health insurance program.

Aisha Faquir/World Bank

Intervention and Evaluation Details


The government will offer low-cost, subsidized health insurance for essential drugs and in-patient health services, the latter of which isn’t covered under the government’s free primary care system. The program will be carried out in three districts, picked by the government. An administrator will be in charge of enrolling people, processing claims and paying providers.


In Nepal, districts are divided into Village Development Committees that act as the local authority for a group of villages. In the three districts where the program will be implemented, there are 300 Village Development Committees, covering a total of 2.1 million people. The committees will be randomly divided into two equal groups of 150 committees each. In both groups, all households in the areas covered by the committees will be offered subsidized insurance.

Because take-up would be expected to be the same in all districts, researchers will also implement an ‘encouragement design” in order to create control and treatment groups. What this means is that people in one of the groups will be encouraged to enroll for insurance through a promotional campaign. The difference in health insurance sign-up rates between households in this group and those in the areas where there’s no promotional campaign will enable researchers to measure the impact of insurance. Researchers will sample 6300 households, or 21 households from each of the Village Development Committees.

Policy Impacts

This impact evaluation of a pilot program will help the Government of Nepal in the design and implementation of a national health coverage plan.