Trends bring voluntary health insurance to Estonia

  • 2001-03-01
  • Aleksei Gunter
TALLINN - Optional health insurance could be introduced in a new law on insurance, as long as the government approves a set of changes to the current law filed by the Ministry of Social Affairs on Feb. 21.

The ministry and the National Health Insurance Fund filed the amendments, which they claim will make Estonian health insurance legislation "unique," different from analog Finnish and German laws, for example.

A number of amendments take into consideration payments for medical services for various population groups, including pensioners, students, regular employees and private entrepreneurs.

Jaak Aru from Doctus, a consulting firm that advises insurance companies on health care issues, commented on the overall situation of Estonian health insurance.

"The new health insurance law is one of three legislative acts that will regulate the Estonian medical industry in the coming years. The other two are a health care insurance fund law and a law on the structure of health care," said Aru. All three original laws were originally passed in 1992. Aru said that two main trends have become evident with every change made since that time, namely the centralization and closure of the Estonian health care market.

"The centralization process has ended by establishing one central health insurance fund instead of 12, as was the case in 1992. The closure of the health care market has resulted in a list of medical procedures that will be paid for by insured citizens. Unfortunately, this list does not include some modern Western medical procedures," he added.


A useful innovation

According to Heiki Nestor, Estonia's minister of social affairs, many European countries where the health care system is still funded from the state budget are considering the option of establishing an insurance principle.

"The budget of the HIF is 4.5 billion kroons ($265 million). Last summer the number of people registered at HIF exceeded 1.2 million, but less than 575,000 of them worked," said Nestor.

He added that only a small number of these employed people could have afforded paying the full price for medical services to provide themselves and their relatives with medical aid when needed, if there were no system of social insurance.

According to the current law, an employer pays 13 percent of an employee's salary before taxes to the HIF. The changes proposed by the ministry foresee an option for voluntary health insurance meant for temporarily unemployed people who can provide themselves with medical services for 13 percent of the average wage on the fourth quarter of the previous year.

"For example, the average monthly salary as of the end of 1999 was 4,799 kroons, so to get a year's health insurance for 2000, a person should have paid 7,486 kroons," explained Maris Jesse, head of the HIF.

However, it hasn't been planned that the option of voluntary health insurance would become a source of income for the state, said Jesse. Both Jesse and Nestor said it would be an uphill struggle to make the innovation popular.

The question of whether the new law will make exceptions for visits and stationary treatment fees remains an open one; according to the current law, pensioners don't pay visit fees or daily charges for stationary treatment.

Those students who remain in university for 10 years, if they keep failing to graduate or if they take academic leave, will be deprived of health insurance three months after the nominal term of study ends.

"Today we have more students registered at the HIF than at the universities," admitted Nestor.


Private insurance

The establishment of private health insurance companies won't take place in Estonia in the near future, predicts Aru.

"The only way for Estonia's wealthy elite, unsatisfied with local health services, is to join some Western medical insurance system like AXA or AIG. But at the same time the obligation to pay 13 percent for state health insurance will remain," said Aru.

"The developers of the new legal framework have pointed out they want to create a unique Estonian health insurance law that is different to Germany's or Finland's," concluded Aru. "Unluckily, this lack of accordance with other European countries could lead to the fact that the new legislation will not survive for more than two or three years until Estonia becomes a member of the European Union."

Ulla Ilisson, the managing director of the life insurance company Sampo Eesti Elukindlustus, said that according to current legislation life insurance companies were not allowed to deal with health insurance.

"We cannot predict whether Sampo will deal with health insurance, because today we are witnessing a total lack of legal basis for this," she said.

Nevertheless, interest in voluntary health insurance exists, said Ilisson. "Our customers are asking for more information about this."

In Ilisson's opinion, it would be easier to start with private health insurance once the second step of pension reforms - optional voluntary pension insurance - becomes more popular in Estonia.