Three weeks granted for proposals to fix Health Insurance Fund deficit
Prime Minister Taavi Rõivas (Reform) in a meeting with Minister of Health and Labor Jevgeni Ossinovski (SDE) and Minister of Finance Sven Sester (IRL) on Wednesday left Ossinovski three weeks to submit proposals on how to cut the spending of the Health Insurance Fund.
“All institutions using taxpayers’ money can only spend within the budget. The Health Insurance Fund is no exception. The demographic situation isn’t the reason behind most of the wrong estimations of this year’s costs. The €33m in excess costs of the Health Insurance Fund are mostly a result of decisions made by the fund’s management, including the adoption of medication that wasn’t forecast, and as a result of which the institution has been managed using an open budget,” Rõivas was quoted in a press release by the Government Office.
According to the prime minister, the management’s decision to give an overview of the fund’s real financial situation afterwards and not when the problems occurred, is unacceptable. “I agree with the finance minister that a deficit can be tolerated to some extent in a situation where tax receipts are declining, but over the past half year €13m more social tax came in, so the planning mistake is even bigger than €33m. The decisions should have been made earlier, while at present a hole is being mended and therefore there are basically no other options left,” Rõivas said.
It was decided that Ossinovski will submit proposals to the Cabinet on Sept. 22 how to get the overspending under control. The prime minister also invited the chairmen of the Estonian Employers’ Confederation as well as the Trade Union Confederation to think along how the issues could be solved.
Sester had said last Friday that Ossinovski needed to come up with proposals how to restore a balanced budget of the Health Insurance Fund, as the fund’s growing deficit was in conflict with fiscal strategy and could jeopardize the state’s finances.
Ossinovski said that the supervisory board of the fund decided to allow bigger costs in order to maintain the volume of services, since the only alternative would have been to leave the Estonian people without healthcare, which would be irresponsible and unacceptable.
According to Ossinovski, the supervisory board of the Health Insurance Fund decided to keep the volume of healthcare services at the present level for the coming four years. He proposed to adjust the budget of the fund.
The revenue of the Health Insurance Fund increased by 7% to €510.9m in the first six months of the year, while operating costs grew by 11% to €543.8m. This means a deficit of nearly €33m.