Compulsory health insurance: delayed future

Citizens' choice of a doctor and access to public resources for the treatment of their disease are the basis of the free health system. Human, on the other hand, considers himself free only if a system of medical services is created for him/her and he/she can benefit from these technical and medical achievements. Because it is the responsibility and interest of every person, who wants to lead a healthy lifestyle, to protect their health. The state is a state because it creates the rights that its citizens cannot protect for them. In this sense, the protection of social equality and security of relatively low-income people should be the basis for the state.

An Azerbaijani citizen must have the opportunity to ensure such a right. However, in countries rich in natural resources like ours, the transition to compulsory health insurance should have taken place a long time ago. The rapid growth of our government revenues gives us a reason to take this opportunity. The current year's state budget has also provided funds for this purpose. However, the first victim of the pandemic's negative impact on the budget was the direction of the expenditure of compulsory health insurance. However, the basics of legislation in this area cover a period of more than 20 years. As we know, the Law on Health Insurance was adopted in 1999. The State Agency for Compulsory Health Insurance (SACHI) was established in 2016. Despite the fact that several years have passed since the establishment of the Agency, of which legislative basis has long been established and which operates as a public legal entity, our citizens have not yet been able to benefit from it.

It is true that pilot projects have been implemented in several regions. The pilot project covered the administrative territories of Mingachevir, Yevlakh, and Aghdash districts. Within the framework of these projects, it has been implemented in Mingachevir city and Yevlakh district since 2017, and in Aghdash district from 2018 to 2020. In its report last year, SACHI noted that no insurance premiums had been collected from 344,000 people under the project in the three pilot districts.

It is now clear that health expenditures in the pilot areas have not been significantly met by the state. In general, in 2019, 43 million AZN was spent to finance health expenditures under the pilot project.

Compulsory health insurance financing mechanisms

In order to implement this project, the state's fiscal institutions wanted to start working again by placing funding mechanisms on citizens. This is stated in the project to be implemented for this purpose. Such that compulsory health insurance premiums would be levied on employers and employees working in the public and oil sectors in the amount of 2% of the monthly salary fund up to 8,000 AZN and 0.5% of the part above 8,000 AZN. In this case, if a citizen receives a monthly salary of 8,500 AZN, compulsory health insurance premium will be calculated at 2% of 8,000 AZN and 0.5% of the remaining 500 AZN. Compulsory health insurance premiums would be levied on employers and employees working in the non-governmental and non-oil sectors in the amount of 1% of the monthly salary fund up to 8,000 AZN and 0.5% of the part above 8,000 AZN. As can be seen, the transition to compulsory health insurance is planned mainly through the collection of taxes from the income of citizens.

In its calculations on the transition to compulsory health insurance, the government said that this year, if the average salary is 620 AZN and the insurance premiums are paid during the year, it will be only 500 million AZN. Taking into account the allocation of 1 billion AZN from the state budget, it is clear that the total budget of the State Agency for Compulsory Health Insurance was estimated at 1.5 billion AZN.

However, since the issue of the pandemic has made it difficult for the government, the compulsory health insurance costs were rejected as the first issue. In other words, the negative impact of falling oil prices on the world market has hit the health care system. At the plenary session of the Parliament on March 30, 2020, amendments were made to the Law on Health Insurance and its execution was postponed to the next year. After that, 97 million AZN was allocated to the Agency from the President's reserve fund.

However, the spontaneous emergence of the pandemic gave the message that health is a more priority. The fact that health expenditures from the state budget do not meet WHO criteria (not less than 3% of GDP) and the lack of transition to compulsory health insurance really determines the state of our health system.

In a country without access to health care services, it is pointless to talk about social policy. Because one of the main parameters of social policy is related to the effective functioning of the health system. When the health care system takes the path of service to the citizen, even a small fact will be an effective message to him/her. The World Health Organization (WHO) said in a 2008 report that Azerbaijan ranked first in the world in the prevalence of incurable forms of tuberculosis. The increase in the number of such diseases, the spread of oncological diseases almost like the flu, the departure of our citizens who want to take advantage of health tourism, the forced sale of their apartments for serious surgeries, and other numerous facts suggest that the delay in the transition to compulsory health insurance every year significantly undermines the confidence of our citizens in the state.

For many years, independent economists have written that if we do not ensure the transition to such compulsory health insurance at the peak of oil revenues, then it will be difficult. Then the question arises: why did the government, which did not implement the transition to compulsory insurance at the peak of oil revenues, choose such an inconvenient period of time? This is not about a pandemic of the coronavirus. Is it just a coincidence that the time period was chosen when less oil money was received in the post-oil period? Now, in response to this question, government officials have repeatedly said that the delay in compulsory health insurance is due to a lack of funding. In fact, in a country with such vast financial resources, perhaps the first of the most important projects to be funded had to be compulsory health insurance. Unfortunately, although it was late, we still could not take this project to the future. Although it is late, we are still not able to go to the future…

The instructive message written at the head office of the World Health Organization should be hung on the door of the structures responsible for our transition to compulsory health insurance: "Prevention is better than cure". The State Agency for Compulsory Health Insurance should provide this care and preventive measures. If its activity is kept passive for an indefinite period, it is really worth thinking about.

Mohammed Talibli