Estonian Social Affairs Minister Karmen Joller has abandoned a proposal to request annual state funds for children's healthcare costs during upcoming autumn state budget negotiations. The plan originally suggested requesting between 50 and 100 million euros annually from the state budget, a model previously used by former minister Riina Sikkut.
The decision comes as the Estonian Health Insurance Fund (Tervisekassa) faces a significant financial deficit. Original forecasts expect the fund's deficit to exceed 100 million euros this year.
Proposed annual state support for children's healthcare by 2032
In the spring, Minister Joller's proposal suggested the state would pay an additional 51 million euros to the Health Insurance Fund for children in 2029, with support potentially increasing to 109 million euros annually by 2032. The Ministry of Social Affairs estimated that compensating these costs could allow the Health Insurance Fund's revenues and expenditures to reach a balance by 2032.
In Estonia, working people fund almost the entire medical system through social tax, though they constitute approximately half of the people entitled to free health insurance. While children and young people under 19 receive known free medical care, such as dental care, they do not contribute social tax to the Health Insurance Fund. A system has been in place since 2018 where the state pays a fixed amount to the Health Insurance Fund for non-working pensioners.
The Ministry of Social Affairs assessed in the spring that a worsening economic outlook makes it uncertain if reserves will last until 2029. If the situation follows the Ministry of Finance's spring economic forecast, the 2029 deficit could be nearly 50 percent larger than previously estimated.
New funding priorities
Minister Joller has identified increasing training capacity for doctors and nurses, as well as increasing the number of residents, as priorities for which she will seek funding this autumn.
If we don't deal with this, we won't get anywhere.
The Minister also intends to focus on digital innovation, such as the use of artificial intelligence in healthcare.
Private funding and tax incentives
Regarding the previous proposal, Minister Joller stated that the decision on the allocation will have to be made sooner or later and said, 'Let the next government decide.' She added that the plan was not her main proposal this spring.
A memorandum from the Ministry of Social Affairs stated that increasing private insurance and out-of-pocket payments is not a reasonable way to solve the financial crisis, noting that increasing private insurance without strong regulation could deepen inequality in healthcare access. Currently, employers in Estonia can provide up to 400 euros per year in tax-free health promotion benefits to employees. The Ministry noted that nearly three-quarters of this benefit is spent on private insurance and medical services rather than actual prevention.
Minister Joller proposed reviewing the tax incentive system for health promotion and potentially indexing the 400 euro limit to inflation. She told ERR that more detailed proposals regarding the involvement of private funding should be completed by the end of the year.
