On March 15, the Bulgarian Government is due to make a landmark decision on health care. It is expected to agree to the liberalisation of health care services. Despite the Cabinet remaining tight-lipped on the details of the reform, local experts believe it will strip the National Health Insurance Fund (NHIF) of its monopoly on mandatory health insurance services.

The ruling coalition took a political decision to this effect on February 10, at a weekend summit in Hissarya. Politicians admitted that the Movement for Rights and Freedoms was the main author of the idea to allow private players into the entire health care services market.

The move is likely to reduce local and international criticism of the Government over its delay in reforming the Bulgarian health care system.

Currently, private health insurance funds can operate in the sector. However, they are limited to providing voluntary health insurance services such as out-of-hospital and hospital treatment, and services defined under “other packages”.

The limits placed on the 15 voluntary health insurance funds meant that in the 11 months to November 2007 they received only 22.6 million leva in premiums, according to data from the Financial Supervision Commission. By comparison the market for non-basic health services, that is those that are covered by category of mandatory health insurance but require additional payment, was one billion leva, unofficial data given to Dnevnik daily showed.

It is this market that the private and alternative health insurance funds are looking to enter, local players said, especially as the market is expected to grow. Health Minister Radoslav Gaidarski announced that health insurance contributions would be increased by three percentage points to nine per cent of gross salary from July 1 this year.

He argued that this was necessary in order to accumulate sufficient funds to allow supplementary health funds to start operating from 2009.

The Government’s decision, local experts argue, is intended to start the process of ending the monopolisation of NHIF, completing the process by early 2009. However, the rules to govern the process have not yet been decided. Speaking at a health care conference in late February, Gaidarski said there were two alternatives: partial and full liberalisation.

Under the first option, NHIF would be the sole distributor of funds for basic health care services. This means it would be in charge of administering health insurance contributions that account for six per cent of gross salary and the private funds would complete to administer the remaining contributions, the additional three percentage points. In the second option, private funds would compete with NHIF on all health insurance services, in effect creating a free market.

In either case, funds that want to enter the liberalised market will be subject to an eligibility test. A major criteria will be that at least 100 000 people have committed to the fund.

In anticipation of the reform, some players have already begun setting up health insurance funds to ensure that they correspond to all the eligibility requirements by the time the market is liberalised in 2009.

The head of the Military Medical Academy – the Military Hospital general – Stoyan Tonev told Dnevnik that the hospital would start generating funds as of June 1. Tonev said everyone with health insurance was welcome to subscribe with the fund, military personnel and their families, and civilians. Once the fund was operational, the hospital would not restrict its services to subscribers to the fund, Tonev said, removing doubts that the hospital might introduce preferential treatment for its fund members.

With the move, the hospital became the first state-run entity with its own health insurance fund. Its entry to the health insurance services market is set to have a significant impact on the market because of its solid reputation with patients.

Private Tokuda Hospital was the first hospital to launch a health insurance fund last year. Health insurance fund Doverie has its own hospital and has plans to buy more.
The Military Hospital is among the 64 hospitals of national significance that remain under state ownership. As previously reported in The Sofia Echo, in early February parliament waived the ban on the privatisation of all hospitals except the university, specialised and multi-profile hospitals with special amendments to the Privatisation and Post-Privatisation Control Act.