Joller leaves health fund crisis to next government

Estonian Social Minister Karmen Joller has abandoned a plan to ease the Health Insurance Fund’s long-term funding crisis, leaving the issue for the next government, ERR reported.

The Health Insurance Fund is still facing a substantial shortfall. Its budget was initially expected to run more than 100 million euros into deficit this year, while funding in the following years will also have to be drawn from reserves.

The Ministry of Social Affairs warned in the spring that worsening economic forecasts made it uncertain whether the reserves would last until 2029. If conditions develop in line with the Finance Ministry’s spring forecast, the deficit in 2029 could be almost twice as large as previously estimated.

At the end of April, Joller presented the government with proposals to address the fund’s long-term funding problems. Her main proposal was to have the state gradually begin covering children’s medical bills from the state budget.

The proposal followed a plan put forward three years earlier by former Health Minister Riina Sikkut of the Social Democrats. Under Joller’s proposal, the state would start making additional payments to the Health Insurance Fund for children from 2029.

Currently, working people in Estonia finance almost the entire healthcare system through social tax paid on their wages. However, workers make up only about half of the people covered by free health insurance. Children and young people under 19 receive free treatment, including expensive dental care, but no social tax is collected on their behalf.

Joller proposed that workers should no longer have to cover all of the country’s healthcare costs, particularly those of children, through their social tax alone. The plan called for the state to pay 51 million euros for children’s healthcare in 2029, with the contribution gradually increasing to 109 million euros by 2032.

According to the ministry’s assessment, the measure could bring the Health Insurance Fund’s income and spending into balance by 2032. Under the current funding model, the fund’s reserves could be exhausted by the end of the decade.

“It is understandable that in the current state budget situation it is difficult to find additional resources for healthcare when the focus is on security spending, but investing in people’s health is also an investment in the country’s economy and security,” materials presented by Joller to the government said.

Joller’s memorandum said the crisis should not be resolved through private insurance or by increasing patients’ out-of-pocket payments. It said extensive increases in private insurance and co-payments could lead to greater cost pressures, fragmentation of the system and less efficient use of the workforce when resources are limited.