Two-tier health insurance system put on hold in Latvia

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The two-package national health insurance system, which was set up and intended to be implemented by the previous administration, is postponed until 2021 – the Saeima decided at the final reading on June 13. Until then, it is planned to launch a one package system and set a health insurance contribution of 1% for every wage-earner.

After the amendments to the law are made, residents will have a right to receive health care services as before until 2021, regardless of their social insurance contributions, said Mārtiņš Šteins (Development/For), as reported by LSM's Latvian service on June 13.

The amendments are meant to expand the range of persons subject to mandatory health insurance. This will include persons paying the state social insurance mandatory contributions, as well as those who do not pay them or are not subject to mandatory state health insurance. As regards citizens paying voluntary health insurance contributions until July 1 of this year, it was decided that the National Health Service will reimburse them before the end of this year, the Saeima announced.

The amendments also stipulate that the Cabinet of Ministers has to draft and submit a bill by 31 March 2020 in order to introduce comprehensive state health insurance.

Former Minister of Health Anda Čakša (Union of Greens and Farmers) said that the bill does not offer a new one-package health care system. Čakša pointed out the risk of wage cuts for nurses and doctors, as the state would repay the voluntary contributions already made by voluntary citizens. She emphasized that a one package system needs additional funding.

Former Prime Minister Māris Kučinskis (Union of Greens and Farmers) also urged the government to put forward promptly a notion of what kind of health care it wants. He also criticized the idea of health tax for all wage-earners, noting that in such a case the micro-enterprise tax would lose its meaning.

Likewise, former Minister of Economics Dana Reizniece-Ozola (Union of Greens and Farmers) said that with the postponement of the two-tier system for at least a few years patients and doctors will have to wait for some improvements. Moreover, those who are already paying health care tax will continue doing so, while others will not, even though they are receiving the same services. In her view, this is a basis for legal proceedings.

Starting from this year, a health care financing model based on national health insurance and providing two different level service packages should have been instituted for both those who are making these insurance payments and those who are not.

However, the 13th Saeima coalition criticized it as biased and disproportionate, as the two-package system provided different access to health insurance for those making the state social insurance contribution.

It was therefore agreed to abolish the two package system, maintaining mandatory health insurance and extending the range of persons subject to it. It is expected that everyone who earns wages will pay the health insurance contributions of 1% of the social insurance contributions paid from the minimum wage. For all those left out of the system, a minimum contribution of 51 euro will be set.

As such changes will affect not only health care policies but also tax issues, they should be introduced together with the appropriate tax reforms.

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