Bulgarian Government Proposes Increased Healthcare Levy and Transfer of Reimbursement Setting Authority Back to NHIF

Cabinet Approves Plan to Increase Health Insurance Levy from 8% to 10%

The cabinet of the Bulgarian government has accepted a proposal to increase the mandatory health insurance levy in the country from its present level of 8% to 10%, from April 2010, rather than from the beginning of 2011, as initially planned, reports Bulgarian financial news provider, Capital.bg. Finance Minister Simeon Djankov is reported to be confident that the measure will be approved by the Bulgarian parliament, and that it will result in a 300-million-leva (US$211-million) boost to the country's healthcare budget. The proposal is one of a series of around 30 measures which the Bulgarian government is planning to implement in the coming days, which are not being seen as "anti-crisis" measures, but measures to help ensure sustainable economic growth as Bulgaria emerges from recession. The Bulgarian National Assembly is yet to vote on the proposed increase in the health insurance levy. The majority of the 300 million leva which would be raised by the increase would be invested in hospital care, with some also going towards primary outpatient care, and some towards specialist care.

Alternative Plans to Raise Funds Put Forward

However, since the announcement of the plan to increase the healthcare levy, other ideas to raise healthcare funds have been put forward. In particular, it has been suggested that the Bulgarian government is considering an alternative proposal which would involve Bulgarian public sector workers starting to pay health insurance contributions, starting from May this year, reports newswire ADP News. According to the source, finance minister Djankov is not keen on the plan to increase the levy for private sector workers and companies from 8% to 10%. The alternative proposal—to impose a health insurance levy on public sector workers—would raise an estimated 140 million leva in 2010, if introduced in May, and over the course of a year, could generate 210 million leva. Private-sector companies in Bulgaria are opposed to the increase in the health insurance levy, as employers would be liable to pay 60% of the 10% levy, with private sector workers paying the remaining 40%. On the other hand, the Bulgarian Socialist Party is opposed to public sector workers being made to pay health insurance contributions, and it is generally understood that this option would be widely unpopular.

Shortfall in NHIF Receipts from Health Insurance Levy in 2010, While Contributions Increase for January-February 2010

A report presented to the supervisory board of the Bulgarian National Health Insurance Fund (NHIF) shows that, in 2009, there was a shortfall in receipts from health insurance contributions totalling 247 million leva—with the NHIF's total revenue from contributions reaching 2.189 billion leva, rather than the budgeted target of 2.437 billion leva, reports Bulgarian newspaper, Dnevnik. Meanwhile, in the first two months of 2010, in contrast, there has been an increase in the level of health insurance contributions received by the Bulgarian National Revenue Agency, with the combined total received in these months reaching 221.5 million leva, which is 42.5 million leva more than in the equivalent period of the previous year.

Government Proposes Giving Responsibility for Setting Reimbursement Levels Back to NHIF

Meanwhile, another measure which the Bulgarian government is planning to implement is the transfer of responsibility for the setting of reimbursement levels for drugs back to the NHIF, away from the Committee on the Positive List, which was given responsibility for setting reimbursement levels only last year, reports Capital.bg. The source reports that the government's justification for this move would be that it would ensure the efficient allocation of funds for reimbursable drugs. At present, because it is not possible to cut payments to doctors—as these are set in advance under the national framework agreement—there are insufficient funds to cover the drug-reimbursement budget as currently defined. By transferring control of the setting of reimbursement levels back to the NHIF, this would mean a tighter control of these levels, so that there would be less discrepancy between the budgeted spending and actual spending.

Outlook and Implications

There is considerable opposition to the proposed measure to increase the health insurance levy, and therefore it may be defeated by the national assembly, potentially paving the way for alternative measures—such as imposing a health insurance levy on public sector workers—to be brought forward. In any event, the increase in the levy is scheduled to take place at the beginning of 2011, so the Bulgarian government will have to patch up healthcare finances until then, if the measure is rejected. With the Bulgarian economy emerging from recession, and health insurance contributions rising year-on-year in the first two months of 2010, the economic situation in the country appears to be improving; as a result, whichever measures are adopted they are unlikely to be as drastic as they would be were the country's economy still mired in recession.

Meanwhile, the proposal to return responsibility for setting drug-reimbursement levels to the NHIF, a move described as helping to ensure the "efficient" allocation of funds for reimbursable drugs—will almost certainly make it easier to allocate lower amounts of funding for drug reimbursement when budgets are set. In 2009—and, indeed, as is expected to happen this year—the situation has occurred that the NHIF's drug-reimbursement budget ran out towards the middle of the year, and in the last months of the year, had to be supplemented with money from other sources and reserves. The government is seeking to avoid a repeat of this situation. It can be expected that more cost-containment measures will follow during the course of the year.