Bill on payment of social tax on pensioners' behalf passes first reading ({{commentsTotal}})

In the future, the government will pay a portion of the social tax on behalf of pensioners who are not working.
In the future, the government will pay a portion of the social tax on behalf of pensioners who are not working. Source: (Toomas Huik/Postimees/Scanpix)

The Riigikogu on Wednesday completed the first reading of a bill under which the Estonian government will in the future pay the health insurance portion of the social tax on behalf of pensioners who are not employed.

The Riigikogu set Oct. 25 as the deadline for proposals to amend the bill ahead of its second reading.

As a result of the amendments, some €300 million more will be directed toward the Estonian healthcare system over the next five years, beginning with €34 million next year.

Describing the change that the amendments would bring about as revolutionary, Minister of Health and Labour Jevgeni Ossinovski (SDE) noted that no changes have been made to the financing of healthcare in Estonia in the past decade, which has meant increasing waitlists for doctor's appointments for patients.

"A constant deficit in the budget of the Estonian Health Insurance Fund since 2013 is a sign that we have to change the principles of health insurance financing and reduce the dependence of the Estonian Health Insurance Fund's income base solely on the inflow revenue from taxes based on employment in order to ensure the long-term sustainability of the system," Ossinovski said addressing the Riigikogu.

Currently, pensioners who are not employed do not contribute to the health insurance system and the health insurance portion of thesocial tax paid for employed people must cover the medical costs of pensioners paid out from the Estonian Health Insurance Fund as well. According to the bill, the government would start paying a monthly allocation per pensioner not in employment into the budget of the Estonian Health Insurance Fund.

Under the state budget strategy for 2018-2021, the Estonian Health Insurance Fund stands to receive €89 million in 2018, €133 million in 2019, €153 million in 2020 and €176 million in 2021 to finance the treatment of non-working pensioners and the compensation of their prescription medicines.

The financing of healthcare in Estonia currently depends primarily on financing linked to employment, which makes it difficult to generate a sufficient income base. At its April 23 Cabinet sitting, the government decided to expand the income base of the Estonian Health Insurance Fund with an additional input of seven percent of the pension of non-working pensioners in 2018, ten percent in 2019, 11 percent in 2020, 12 percent in 2021 and 13 percent in 2022.

The same bill of amendments to the Estonian Health Insurance Fund Act would make some services currently financed directly from the state budget subject to financing by the Estonian Health Insurance Fund in order to reduce the fragmentation of financing and increase the efficiency of healthcare financing.

The bill would also grant health insurance to monks and nuns who are members of a monastery or a convent of a religious association entered into the Estonian Register of Religious Associations.

The amendments in question would enter into force in stages, with changes concerning the income base of the Estonian Health Insurance Fund to enter into force on Jan. 1, 2018.

Editor: Aili Vahtla

Source: BNS



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