Health Insurance Fund shortfall could reach €200 million
The Estonian Health Insurance Fund (EHIF) is facing a shortfall of between €130 to €200 million and either new taxes or additional money from the state budget are seen as the only solutions.
The crisis is not new, but better-than-expected tax receipts in recent years and extra funding for the coronavirus pandemic have delayed the problems.
EHIF board member Pille Banhard told Tuesday's "Aktuaalne kaamera": "Until the end of 2024, we can see that we can manage with the existing resources, but after that, we will have a serious problem because tax revenues will not cover rising costs and the people's needs. There will definitely be a shortfall of €130-200 million."
Possibilities for finding extra money are slim, said the head of Foresight Center Tea Danilov. One possibility is to expand the tax base.
"We are currently in a situation where health insurance contributions are only collected on earned income. There has been talk of extending this to other income," she said.
Money for healthcare could also come from taxes on dividends, benefits, and rental income, AK reported.
A second option could be for the state to start allocating money for children's treatment, similarly to the way it already does for non-working pensioners. But this would only alleviate the situation until around 2035. There would also be question marks over which taxes to raise.
University of Tartu's Johan Skytte Institute for Political Studies analyst Andres Võrk said: "Before the coalition agreement came out with the plan to raise VAT, I would have said that the most sensible thing to do is to raise VAT, which is a relatively simple tax increase, and use that tax increase to fund the health fund. Now that the increase in VAT has gone to cover the cost of lowering income tax, we can probably no longer take that into account."
Võrk thinks it would be reasonable to raise taxes in areas that impact people's health, such as excise duties on alcohol and tobacco.
"Taxing sugary or sweetened drinks could bring in a couple of dozen million euros. Raising excise duties on alcohol and tobacco — that's actually a big amount. If you raise taxes from there, you could in principle get extra money from there," he said.
Over the last five years, several studies on healthcare financing have been carried out and the most recent, commissioned by the Ministry of Social Affairs, will be completed at the end of the year.
Minister for Health Riina Sikkut (SDE) said political choices should be based on these studies.
"I don't think Estonia is going to go to any extremes, we are not going to ban private health care, and we are not going to say that from tomorrow we are going to add billions to our collective money," Sikkut told AK.
Approximately, 1.2 million people have health insurance in Estonia and social tax, which funds it, is collected from the salaries of 650,000 workers.
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Editor: Mari Peegel, Helen Wright