Cool reception for central bank proposals on health insurance

Proposals from the Latvian Central Bank (LB) to introduce compulsory health insurance for all Latvian citizens have met with a cool reception from members of the ruling coalition, the LETA news service reported Tuesday.

Ruling coalition members believe that healthcare reforms should not be financed with the help of a new tax, therefore redistribution of other funds available from the budget is the more likely solution, LETA said.

Politicians are not willing to express support for one particular healthcare funding model, emphasizing that discussions on healthcare financing reforms are still continuing and all the proposals will be evaluated. Likewise, none is opposing the reform per se, but most agree that, if additional payments are not introduced, redistribution of revenue generated by other taxes could be the most likely option.

The Union of Greens and Farmers says that healthcare funding must not be reformed by increasing the tax burden, as Armands Krauze, chairman of the Greens/Farmers board, told LETA. Likewise, Prime Minister Maris Kucinskis (Greens/Farmers) has said healthcare financing should not be reformed through the adoption of new taxes or health insurance contributions.

Krauze added that the best solution should be arrived at by representatives from the Health Ministry, Finance Ministry, Welfare Ministry and other ministers, and the final decision should be taken based on what funds are available from the state budget.

Saeima member Romualds Razuks (Unity) told LETA that MPs had discussed several options. He personally believes that introducing mandatory health insurance for residents - a proposal that is supported by the Bank of Latvia - is impossible. Therefore, part of revenue generated by several other existing taxes could be used to finance healthcare, namely, social contributions, personal income tax, value added tax. Unity deputy chairman Edvards Smiltens said, on the other hand, that money in the social budget should not be used for healthcare financing purposes, and that he would oppose any new taxes on residents.

National Alliance's co-chairman Gaidis Berzins also opposes the idea that residents should pay a new tax in order to raise enough money for healthcare.

After spending months insisting how important it is that no new taxes should be introduced, the Latvian central bank has recently changed its tune completely and has instead produced detailed proposals for the introduction of the compulsory health insurance scheme in a number of briefings and proposals. 

So far the nominally independent central bank has not shown any intention of producing detailed policy proposals applicable to other priority areas of government activity such as defense spending and procurement.

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