Bulgaria's health care reform is expected to start with a hike in health insurance contributions on July 1 2008, according to the plan drafted by the country's three-way ruling coalition, Dnevnik daily reported on March 6.

The main points of the plan have been agreed and it is only minor details left to be clarified, sources from the ruling coalition told the paper.

Private health insurance funds would be allowed to compete against the National Health Insurance Fund (NHIF) no earlier than 2010, provided that they have at least 300 000 clients.

It appears increasingly likely that mandatory health insurance contributions will rise from six per cent of gross wages to eight as of July 1, as opposed to a hike to nine per cent, which would overwhelm the budget. Currently, the state allocates three per cent points for children's health care and another 0.5 percentage points for pensioners. Starting July, it is expected to start paying the full installment for both groups.

Again as of July, the health ministry will launch the licensing procedure for health insurance funds. The procedure will be two-phased. During the first phase, eligible companies will have to prove a start-in capital of at least 10 million leva, prove the origin of the funds and show their shareholding structure.

The funds that have at least 100 000 clients by January 2009 would be allowed to receive part of proceeds from health insurance contributions, about two per cent. As of 2010, they will be able to receive the full health insurance paid by individuals, if they choose so, but only if they have at least 300 000 clients. Only then will the funds compete for real against the NHIF.

All insured persons who do not choose their private fund by the end of 2008 would be allocated randomly to one by the beginning of 2009. No insured person will be allowed to pass to entirely private health insurance at that stage. In 2010, insured persons will again be allowed to opt for a fund and will have to decide whether to resort to the services of the NHIF, choose the private holding or split their contributions between the two.