Estonia's health insurance system is under pressure. The number of people with chronic illnesses influenced by lifestyle is increasing, treatments are becoming more personalized and more expensive and our capacity to prevent disease is better than ever before.

And yet, we continue to fund healthcare collectively in the same way we did decades ago. All employees contribute 13 percent of their earned wages via their employer and, since 2018, an additional €100–200 million is allocated annually from the state budget based on pension payments — once again, equally on behalf of all taxpayers.

A problem ignored

Having taken part in healthcare funding discussions in various roles ever since graduating from medical school back in the last century, one assumption has remained constant: in everyday life, many people simply do not care much about prevention.

Patients end up at the doctor's office with advanced-stage cancer that could have been detected early through screening. People with high blood pressure or cholesterol either don't know it or abandon monitoring and treatment until they suffer a stroke or heart attack. Vaccination opportunities are declined, resulting in wider spread of infectious diseases and preventable hospitalizations.

These are not merely personal tragedies. These consequences place a burden on the health insurance fund into which we all contribute collectively. When someone repeatedly ignores free prevention options and later requires expensive treatment, others ultimately foot the bill for that personal choice. And it's on this basis that the Health Insurance Fund's financial needs are projected and planned.

The uncomfortable truth of a solidarity-based healthcare system is that it isn't truly fair. Yes, basic healthcare services should be equally available to everyone who needs them. In a developed society, this makes sense both economically and socially. But it is also reasonable to expect that anyone who can help reduce unnecessary spending of the collectively pooled funds should be expected to do so.

Small change, significant impact

A simple yet effective solution would be to moderately adjust the health insurance contribution rate and the level of out-of-pocket payments based on participation in jointly agreed and freely available preventive care programs.

If you actively take part in screenings, vaccinations and regular health checkups, your employer would contribute 12 percent of your salary to the Health Insurance Fund and your personal co-payments would be reduced by 80 to 100 percent. If you do the bare minimum, the contribution would remain at 13 percent and you'd receive moderate discounts. If you completely forgo preventive care, the contribution would rise to 14 percent and standard co-payments would apply.

These examples are illustrative and would require further discussion and more precise calculations. As a starting point, the goal could be to keep the average contribution rate at the current 13 percent of wages and maintain the total volume of funding — assuming people are more or less evenly distributed. What would change are the behavioral incentives.

Benefits for the Health Insurance Fund, employers and pensioners

To achieve systemic change, the motivations of employers and the Health Insurance Fund should be aligned with those of employees and more closely tied to prevention. For the Health Insurance Fund, the entire revenue from the prevention-related portion of the contribution could be earmarked specifically for funding preventive services.

To incentivize employers, the preventive component of the insurance contribution (ranging from 0 to 2 percent) could initially be split between employees and employers, each covering half. The employer's share, however, should depend on the overall participation in preventive care across the company's workforce, not on the choices of individual employees.

In summary, companies where preventive services are actively used would pay less, while those where such services are ignored would pay more. A maximum difference of 1 percent in payroll-related costs would not threaten a company's financial viability but would create the right incentives without pointing fingers.

To ensure fairness, reduced co-payments should apply to all who actively participate in prevention — not just employees, but also children, pensioners and students. This way, they too would benefit from the value placed on prevention, even though they do not pay for health insurance themselves.

Estonia's example and the possibilities of e-health

Estonia wouldn't be the first. Various incentive-based prevention programs have already been implemented quite successfully in countries like Germany, the United States and Japan. But Estonia has something many others do not: a fully integrated digital healthcare infrastructure and data exchange that covers all medical institutions.

We have proven to ourselves and shown the world how to build a truly functional digital state. Now we have the opportunity to demonstrate that e-health is not just a technical achievement, but a tool for creating a smarter and more sustainable healthcare system — one that supports disease prevention effectively, transparently and fairly.

As a starting point, it makes sense to rely on objective, medically proven activities that are already tracked in the Health Insurance Fund's databases: participation in national cancer screening programs, vaccinations recommended by the national immunization schedule, health checkups (such as occupational health screenings) and monitoring of chronic conditions (like high blood pressure and blood sugar). There is no need to politicize lifestyle choices by monitoring state-mandated behavior, step counts or sleep data.

Building solidarity through responsibility

Such a healthcare funding model would preserve universal health insurance while also recognizing personal choice and responsibility. Everyone would remain insured. Everyone would receive care when needed. At the same time, financial contributions would align with participation in preventive care and its impact on the shared costs of the Health Insurance Fund, making the system both fair and practical. Naturally, exceptions based on medical indications must be taken into account.

In the end, solidarity from the healthy toward the sick would be complemented by a shared responsibility for one's own health behavior. And importantly, everyone would retain the right to make independent decisions about their own health.

We could start now, carefully and gradually

The reform described is achievable and the risks are manageable, provided it is carried out calmly and step by step. What matters most is a strategic commitment to valuing prevention and a fair distribution of responsibilities and benefits among all stakeholders.

The first phase should focus on the simplest and most universally accessible activities, such as screenings, vaccinations and regular health checkups. More complex elements can be added later if necessary, once the system has proven itself and public trust has grown.

A couple of years from now, we could see increased participation in screening programs, better early-stage monitoring of chronic diseases and higher vaccination rates. Five years from now, there could be fewer strokes, heart attacks and preventable illnesses. That's a goal everyone could contribute to, including financially.

The current health insurance system treats prevention as optional. In a future funding model, it should be unavoidable. The idea isn't radical; in fact, it should be self-evident because we already have both the technology and the knowledge to make it work.

The only question is whether Estonia will take this step among the first or the last.

--

Follow ERR News on Facebook and X and never miss an update!