The Estonian Foresight Centre: Current funding model for health care not sustainable

Estonia does not have a sustainable solution for its health financing problem as the budget deficit of the Health Insurance Fund will reach €900 million by 2035, according to the Estonian Foresight Centre, a think tank at the Estonian parliament.

The budget of the Health Insurance Fund will fall into deficit already in 2025 when temporary additional funding ends, the Foresight Centre said in its report, “The Future of Health Care in Estonia. Scenarios up to 2035”.

An expert at the Foresight Centre, Magnus Piirits, said that while the deficit in the health care budget has been temporarily mitigated by supplementary funding, a systematic solution has yet to be found for the budget deficit.

“The shortage of money in health care has been talked about for at least 20 years, but there is still no agreement with regard to possible new funding solutions for the Health Insurance Fund. Essentially, we’re currently operating under growing deficit conditions and at the same time, there is a clear need to improve the availability of health services, reduce waiting times and people’s own contribution,” Piirits said.

Pärnu Hospital. Photo by Pärnu Hospital.

The severest unmet need for health care in Europe

The Foresight Centre’s conclusion in its report was that Estonia has the severest unmet need for health care in Europe and if the present health insurance system continues, the availability of health care services will deteriorate.

Underfunding in health care is becoming increasingly prominent due to the expenditures of the Health Insurance Fund growing more rapidly than its revenues.

“The Estonian population is aging and people live longer than ever before, but with health problems. With the spread of new work forms, social tax receipts are decreasing, however,” Piirits noted.

The budget of the Estonian Health Insurance Fund has so far been kept in balance with temporary supplementary funding. A major change occurred in funding for the Health Insurance Fund in 2017, when social tax started to be paid also for pensioners who do not work. 

The second major change took place in 2020 when a decision was made regarding temporary supplementary funding for coping with the coronavirus crisis, which helped keep the budget in balance. However, the supplementary funding will end in 2025.

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