Concerns about the Health Insurance Fund's looming financial shortfall were already raised in the mid-2010s. In 2018, a temporary solution was found and the state budget began allocating funds to the Health Insurance Fund to cover the share of non-working pensioners.

During the COVID-19 pandemic, the Health Insurance Fund received an additional financial injection, which, among other things, helped build up reserves. However, the fund's fixed costs continue to exceed its revenues, causing reserves to deplete rapidly.

During last year's budget negotiations, the Health Insurance Fund was allowed to tap into its reserves. Board member Pille Banhard said that this would cover the deficits for this year and next. The accumulated undistributed reserve stands at approximately €500 million, while the annual deficit reaches around €200 million. By 2027, the crisis reserve would have to be used, but beyond that, the fund would run out of money.

All of this was already known last year. At the time, then-Minister of Health Riina Sikkut (SDE) proposed covering the deficit through the state budget. Similar to the current arrangement for pensioners, the state would contribute to the Health Insurance Fund on behalf of children.

Kallas: the necessary €200 million will likely not be found

This proposal did not gain traction during budget negotiations and is unlikely to succeed following the latest coalition talks either. "Given the current situation, finding hundreds of millions of euros is not realistic," said Minister of Social Protection Signe Riisalo (Reform).

Kristina Kallas, who is leading the Eesti 200 delegation in the coalition negotiations, was even more direct. She believes that with rising defense expenditures, increases in other fixed costs must be limited and additional funding for healthcare should not be taken for granted.

"We must assume that we need to cover healthcare costs in the coming decades with approximately the same level of funding as today," Kallas stated. "It is highly unlikely that an additional €200 million will be allocated."

Reform's Karmen Joller, a member of the Riigikogu Social Affairs Committee, acknowledged that healthcare does need additional funding. However, she emphasized that before any budget decisions are made, it is essential to determine how the money will be spent.

"We have as much time as the available funding allows to reassess what needs to be reviewed in the Health Insurance Fund's funding principles, service quality and accessibility," Joller said.

Estonia has gained more than 76,000 over-65-year-olds in 25 years

Pille Banhard confirmed that the Health Insurance Fund is continuously seeking ways to improve efficiency. However, many decisions require political action.

"If there were easy solutions, they would have already been implemented," Banhard said. "We simply have to move toward slightly changing people's behavior, adopting digital solutions and ensuring that the right specialists are doing the right work."

However, such measures are unlikely to cover a €200 million shortfall — especially since healthcare costs are more likely to rise than decrease. At the turn of the millennium, Estonia had 191,000 people aged 65 and older; today, that number has grown to 267,000. According to the Health Insurance Fund's calculations, if Estonia's demographic situation had remained unchanged, healthcare costs today would be €155 million lower.

All of this means that cuts amounting to hundreds of millions of euros will likely have a noticeable impact on people.

"If services are reduced, a cut of around €10 million would mean delaying treatment for about 10,000 people," Banhard explained.

Other options exist, including the frequently discussed introduction of private funding. "This essentially means increasing individuals' out-of-pocket contributions for a certain period," said Kristina Kallas. She added that the coalition negotiations, which are set to continue until May, should provide more clarity on the future of healthcare funding and broader system reforms.

Joller: Healthcare needs a central vision

Karmen Joller believes that making fundamental decisions in healthcare requires clearer leadership. "The Ministry of Social Affairs has delegated much of its role to the Health Insurance Fund and, perhaps, also to healthcare institutions. In reality, we lack a unified vision of what kind of healthcare system we want in Estonia and how we should achieve it," Joller said.

She pointed to the sector's development plans as an example. "The hospital network development plan was adopted at the end of 2024, but it ended up being a very general document. As a result, hospital directors find it difficult to determine what steps to take next and which services should remain in their hospitals," Joller explained.

The primary care development plan was signed in February. "But in the Social Affairs Committee, we were told that it is not actually finalized, it was merely made public," Joller said. She also noted that the Union of Estonian Medical Emergency submitted its vision for an emergency medical services development plan last August. "They were promised a response by October, but in February, we were told that the entire plan needs to be redone," she added.

Lutsar: Hospital network should be revisited

According to Irja Lutsar, a member of Eesti 200, the original purpose of allocating 13 percent of social tax was to fund the diagnosis and treatment of illnesses.

"Over time, a whole range of new services have been introduced — support for quitting smoking, alcohol and drugs, as well as mental health services and counseling. A lot of resources are now going into counseling, which raises the question of where to find additional funding for these services. This likely requires a broader societal discussion," Lutsar explained.

She noted that there is still considerable duplication in the medical field and said that her party has ideas on how to cut costs, including critically reassessing the hospital network.

"I'm not in favor of closing hospitals — that's probably unnecessary and communities need smaller hospitals to remain. But the real question is what services they should provide. Where should surgical procedures be performed? Where should maternity services be available?" Lutsar elaborated.

Sikkut: Need for additional funding clear from analyses

Riina Sikkut, who moved to the opposition last week after stepping down as minister of health, remains firm in her stance — she believes there is no alternative to bolstering the Health Insurance Fund with state budget funds.

"Debating whether additional funding is needed for healthcare is a rather fruitless exercise because every analysis already gives us the same answer," Sikkut stated.

She believes the question of additional funding should be resolved during the 2027 Riigikogu election debates. In her view, there is no room for cuts comparable to the annual deficit.

"If a person has been prescribed medication that must be taken daily, we cannot suggest taking it every other day," Sikkut emphasized. "The standard of healthcare services must be maintained even now."

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