Health insurance popularity grows in Latvia

Health insurance is the most popular type of insurance in Latvia and is one of the most important assets employers offer. There are long queues for state services, but private medicine has been increasing in price in recent years, Latvian Radio reported on February 26.

As medical service prices grow, many employers are pleased that this year the tax-free limit for health insurance policies has been significantly increased - from €426 to €750. 

Jānis Abāšins, President of the Latvian Insurers' Association, said that the growth of health insurance purchases is over ten percent per year.

"Employers are interested in their employees working and, if they fall ill, in making sure that the illness does not last long. That is the main driver because that health insurance ensures that the employee gets to the doctor on time, doesn't have to stand in long queues, so is back quickly after getting sick," Abāšins said.

Sandra Pietkēviča, representative of the insurance company "Balta", said that last year the number of insured companies increased by 16%. Last year, the company paid out 35% more in health insurance claims than in the previous year - 26 million euros, which is due to the increase in medical prices.

"In terms of customer habits, life is back to normal. Outpatient healthcare services, dental services - which, by the way, have one of the highest inflation rates at the moment - and outpatient rehabilitation services are again the most used. Price inflation in the healthcare sector is the fastest it has been in a decade. The rate of inflation has varied widely - in some places, it has been a few percent and in others it has been dozens," said Pietkēviča.

Ināra Pētersone, executive director of the Association of Healthcare Employers, said the average price increase in medicine last year was between 7% and 12%, driven by increases in rent and utilities, wages and interest on loans, medical supplies and medicines. But prices for services have risen differently.

Peterson noted, "In diagnostics and radiology, there have been relatively few price increases, but it is visits to specialists that have risen in price the most. And why? The availability of specialists has a very significant impact on salaries and the fewer specialists there are who specialize in a particular area and the longer the queues, the more they are paid. And there are certain services where there is even a 40% increase."

Rising prices in the health sector reduced the number of services available, so this year the limit on which employers have to pay payroll taxes on health insurance policies was increased. 

The President of the Association of Insurers explained, "The change in the limit from this here €426 to €750 is clearly a long-awaited move from a number of sectors. This is yet another reason why health insurance is likely to continue to grow at double-digit rates in this and the coming years."

Last year, health insurance premiums amounted to €155 million and insurance policies partly compensate for the lack of public funding in the health sector. 

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