Lithuanian Case. Securing Stable Revenue for Health: Earmarking and Counter-cyclical Policies

Transcription

1 Joint OECD and WHO meeting on financial sustainability of health systems in central, eastern and south-eastern Europe Securing Stable Revenue for Health: Earmarking and Counter-cyclical Policies Lithuanian Case Gintaras Kacevičius Simona Adamkevičiūtė Lina Noreikienė June 28-29, 2012 Tallinn, Estonia

2 The Budget of the Compulsory Health Insurance Fund (CHIF), EUR million Global financial crisis 1400,0 1200,0 1000,0 800,0 Russia financial crisis 600,0 400,0 200,0 0, before correctio 2009 after correctio plan Plan 377,0 575,8 592,4 544,1 545,9 530,5 547,0 593,5 683,7 835, , , , , , , ,6 Fact 379,2 563,0 530,4 529,5 542,9 556,9 609,5 692,3 836,4 986, , , , , ,3 2

3 The Budget Revenue of the CHIF (EUR million) Global financial crisis Russia financial crisis balance of the budget resources at the beginning of the year 3

4 Provisions of the Law on Health Insurance The budget of the CHIF must be balanced within a medium-duration period (Article 14). If actual budget revenue of the CHIF is less than that approved <...> the Ministry of Health, upon evaluation of the opinions of the National Health Insurance Fund and the Compulsory Health Insurance Council, makes proposals to the Government to correct the budget of the CHIF (Article 27). If actual budget expenditure of the CHIF exceeds the expenditure approved in the plan <...> the Ministry of Health, upon evaluation of the opinions of the National Health Insurance Fund and the Compulsory Health Insurance Council <...> makes the decisions to set such an amount of payments and compensations which corresponds to the approved plan of expenditure (Article 27). 4

5 Compulsory Health Insurance Contributions are an Important Part of the Budget Revenue of the CHIF 5

6 Additional State Budget Allocations are a part of the Budget Revenue of the CHIF Each year the Government also sets the amount of additional State budget allocations for the budget of the CHIF. They are used to finance functions, which are delegated to the CHIF by the State (eg. compensations for blood donors), to compensate the reduction of the revenue of the budget of the CHIF due to the tax reforms implemented by the State. 6

7 Compulsory Health Insurance Contributions Paid by Employed Persons and by the State 7

8 One of the Main Factors Impacting the Number of Persons Insured by the State is the Number of Unemployed Persons 8

9 The Base of Contributions Paid by the State Extract of the Law on Health Insurance: 2. The amount of the contribution <...> for one insured person covered with State funds, shall be in the year per cent of the average of the national economy employees average monthly gross earnings of four quarters of the year preceding the last year, as announced by the Statistics Lithuania <...>, in the year per cent, in the year per cent, in the year per cent, in the year per cent <...> (Article 16) 9

10 The Comparison of Average Contribution paid by the Employed Person and by the State 10

11 During the last 20 years the number of population decreased by 13 percent 11

12 Reforming Compulsory Health Insurance Contributions Reform was implemented in January 1, The main aims of the reform were: To introduce separate compulsory health insurance contributions, unrelated to personal income tax (eg. before reform health insurance fee of employed person amounted to 30 percent of their personal income tax, now it amounts to 6+3 percent of person s wage); To make compulsory health insurance contributions less dependent on political decisions and this way ensure a sustainable budget revenue of the CHIF; To increase people s awareness of compulsory health insurance. 12

13 Examples of Assessment Changes Reduced contributions Revalued contributions For persons who are not involved in economic activities and are not insured by the State: Before the reform they had to pay approximately 65 EUR a month, now they have to pay approximately 21 EUR a month For persons conducting individual activities when acquiring a business certificate: Contributions are calculated in proportion to the period of validity of the issued business certificate. Some of them can also pay their contributions after a year For farmers: Before the reform they had to pay approximately 3,5 8 EUR a month, now they have to pay approximately 7 21 EUR a month Examples of Other Changes The minimal insurance (3 months in a row) record was set to self-employed persons. There is also a possibility to pay additional contribution in the amount of three minimum monthly earnings and become insured instantly. These contributions are the revenue of the budget of the CHIF. This payment does not release from the duty to pay the regular contributions. 13

14 Dynamics of the Budget of the CHIF and GDP 14

15 Summing-up (1) It is important to encourage small businesses when the number of employees decreases. An important tool that helped mitigate cyclical fluctuations were accumulated reserves. The base of contributions paid by the State and by other insurable people, is a tool to mitigate cyclical fluctuations. Wary revenue forecast can help to avoid painful consequences. 15

16 Summing-up (2) Contributions could be cyclically reviewed. Reduction of contributions not always means decrease of revenue. It remains important to encourage society to take care of their health insurance. Management of expenditure gives a more instant effect that helps match decreasing actual income with remaining level of expenditure. 16

17 Thank you for your attention!