More than MVR 35 billion has been spent on health services and medical treatment over the past five years, according to a performance audit of the Aasandha health insurance scheme released today by the Auditor General’s Office.

The audit report said the state spent MVR 35.8 billion on health services between 2019 and 2024, including expenditure under Aasandha and spending outside the scheme. This represents an average annual health expenditure of MVR 5.9 billion. During this period, Aasandha emerged as the second-largest component of the state budget after hospitals, with MVR 16 billion spent under the scheme alone.

The Auditor General’s Office noted that while the number of people using Aasandha services increased by seven percent over the five years, spending under the scheme rose by 32 percent, indicating rapidly rising costs. Medicines were identified as the largest cost driver, with Aasandha spending an average of MVR 924.8 million annually on drugs, a figure that continues to increase by about seven percent each year.

Private healthcare spending also contributed to higher costs, totalling MVR 3.1 billion over five years. During this time, 83 clinics and two hospitals were brought under Aasandha, with MVR 779.8 million paid to clinics. Although clinic-related spending remains relatively low, it is growing at an annual rate of 18 percent.

The audit highlighted overseas medical treatment as another major expense. Visiting doctors are allowed to refer patients abroad, contributing to higher foreign medical costs. Spending on overseas treatment reached MVR 1.6 billion between 2019 and 2024, despite the availability of specialists in the Maldives for many commonly referred conditions. The report also noted that agreements with foreign hospitals aimed at developing local medical specialties have not been implemented.

Aasandha expenditure is projected to reach MVR 4 billion by 2027, marking a 62 percent increase compared to 2019. The audit concluded that Aasandha is not being operated in line with the law, noting that if a premium-based insurance model had been implemented as required, expenditure in 2023 alone could have been reduced by MVR 1.6 billion.

To address rising costs, the Auditor General’s Office recommended introducing a maximum retail price system for medicines, implementing co-payments for overseas treatment, shifting to targeted subsidies for those most in need, and conducting research into diseases commonly treated abroad to strengthen preventive healthcare measures.