At its core, the national health insurance system is meant to protect citizens from the financial burden of medical expenses and to ensure that healthcare services are delivered equitably, efficiently, and with quality. In principle, it is a safeguard, a mechanism designed to guarantee that no one is denied care due to cost. However, in recent years, it is not an exaggeration to say that the government has all but abandoned this fundamental responsibility.
More specifically, over the past three to four years, since the Health Insurance Fund was transitioned to a performance-based financing model, citizens have increasingly found themselves unable to access services even at public hospitals using their insurance. The system itself appears to be collapsing under its own weight. The General Office of Health Insurance, which is entrusted with managing and allocating the fund, has effectively been reduced to a passive purchaser of services, medications, and supplies from hospitals and pharmacies. As a consequence, the state insurance system no longer serves its contributors. The premiums paid by citizens often fail to cover even half a year’s worth of services. The fund repeatedly runs short of resources, struggling to meet its financial obligations and, in effect, “running on empty”.
This raises a pressing question: whom can citizens rely on? Increasingly, many are turning toward private health insurance as a more viable alternative—one that, in some cases, may even prove lifesaving. Private schemes often offer broader service coverage, greater choice, and higher reimbursement rates, while requiring contributions comparable to those of the public system.
Every employed citizen contributes to the health insurance fund through payroll deductions, matched by employer contributions, and further supplemented by allocations from the state budget. Through this tripartite financing structure, the Health Insurance Fund has accumulated substantial resources over time. Its annual budget has steadily grown, reaching approximately 2.4 trillion MNT this year. In theory, such a fund should serve as a reliable and sustainable financial backbone for the nation’s healthcare system. In reality, however, both the public and patients themselves can clearly see and directly experience the widening gap between promise and performance.
Put simply, the efficiency and accessibility of the fund have deteriorated sharply in recent years. Contributors are no longer receiving healthcare services commensurate with the premiums they pay. This imbalance has become a major source of public frustration and distrust.
WHAT IS GOING WRONG?
Before advocating for the expansion of private health insurance, it is essential to examine what exactly is failing within the public system. A brief look at key figures reveals a fundamental flaw: while significant premiums are collected from citizens each year, the services provided in return remain limited and insufficient.
The office continues to promote the ease of paying contributions, particularly by advertising various payment apps and clearly listing annual premium rates. These figures show a consistent increase over time. For example, in 2019, an insured individual paid 3,200 MNT per month, or 38,400 MNT annually. By 2024, this had risen to 6,600 MNT per month, or 79,200 MNT per year. In 2025, the increase became even more pronounced, with monthly contributions reaching 13,200 MNT in the first quarter and rising further to 15,840 MNT from April onward. By 2026, an insured citizen is expected to pay 190,080 MNT annually.
Taken together, between 2019 and 2026, an individual will have contributed a total of 707,040 MNT to the health insurance fund out of their own pocket. Employers match these contributions, meaning that at minimum, 1,414,080 MNT is accumulated per insured individual over this period. For a household with two working members, this translates into more than 2.8 million MNT paid into the system, which is a significant sum by any standard.
What makes this situation particularly concerning is that the officially published contribution rates are calculated based on the minimum wage. Those earning higher incomes pay substantially more, often hundreds of thousands, even millions of tugrug per month. This is where the core issue becomes evident: despite the substantial and increasing financial input from both employees and employers, the quality and availability of healthcare services continue to decline.
Why, then, are public hospitals facing chronic underfunding? Why are essential medical supplies, such as disposable items and basic treatment materials, frequently unavailable? Why are there shortages of medicines and injections? And why have preventive services and early detection screenings been halted?
These are not isolated problems. Rather, they point to a systemic failure, clear evidence that the current national health insurance system has become inefficient and is no longer fulfilling its intended role.
POSSIBLE TO PROTECT EVERY CITIZEN
When compared with private health insurance, a very different picture emerges. In Mongolia today, around four to five insurance companies offer private health insurance services. However, public awareness remains low, and there is little to no policy-level support from the government.
A closer look shows that annual premiums for private health insurance packages typically range between 300,000 and 800,000 MNT, with coverage limits of 10 to 20 million MNT. Some premium-tier packages offer even higher reimbursement ceilings. In other words, for a contribution roughly comparable to what employees and employers already pay annually into the public system, citizens could potentially access more clearly defined, accessible, and comprehensive healthcare services.
For instance, based on the official tariff set by the Health Insurance Office, the combined contribution of an employee and employer to the public health insurance system in 2026 will amount to 380,160 MNT. Yet if that same individual were to contribute slightly more, around 500,000 MNT, to a private insurance plan, they could gain access to high-cost services such as MRI and CT scans, inpatient treatment, surgeries, and emergency care at major, specialized hospitals, services that can otherwise cost several million tugrugs.
Private insurers typically establish contracts with hospitals of their choosing, regardless of ownership type, ensuring broader access to healthcare providers. It is therefore worth exploring such companies and their offerings. By contrast, even with higher contributions, accessing tangible services through the public system remains difficult.
Under Mongolia’s current system, citizens are required to pay health insurance contributions monthly or annually. Yet when they actually seek medical care, they often still have to pay out-of-pocket, which is an unfortunate and deeply concerning reality. According to repeated warnings from the World Bank, a significant share of household healthcare spending in Mongolia consists of direct, out-of-pocket payments. This means that even insured citizens are forced to pay again at the point of service, placing a heavy financial burden on households and, in many cases, pushing them toward poverty.
International experience suggests that increasing the role of private health insurance can significantly improve system efficiency under such conditions. In Australia, for example, the government provides tax incentives to citizens who enroll in private health insurance, thereby reducing pressure on public hospitals. In Germany, higher-income individuals often opt for private insurance, while the public system focuses on protecting vulnerable populations. In France, public insurance provides basic coverage, and private insurance supplements it with additional services. These blended systems demonstrate how combining public and private mechanisms can deliver more efficient and effective healthcare.
As discussed, Mongolia has the potential to adopt a similar approach. If a portion of the contributions currently paid into the public health insurance system by citizens and employers were redirected toward private insurance, it could reduce the burden on the Health Insurance Fund while providing citizens with more tangible and reliable protection.
Put simply, while the current public system attempts to “spread limited resources thinly across everyone”, a reformed approach could instead ensure that each individual is genuinely protected from the financial risks associated with illness. This is precisely why private health insurance deserves policy-level support.
In today’s context, advancing private health insurance in Mongolia is no longer simply a matter of individual choice or market preference; it has become a strategic imperative. Strengthening this sector is essential to improving the efficiency, resilience, and long-term sustainability of healthcare financing, while also ensuring that citizens receive more reliable, timely, and meaningful financial protection against the rising costs of medical care.
