A previous plan had been to obtain €50–100 million a year from the state budget to go towards child healthcare at a time when the state Health Insurance Fund (Tervisekassa) is facing budgeting pressure.

At the end of April this year, Social Affairs Minister Karmen Joller presented the government with her own ideas on how to rescue the Health Insurance Fund from its long-term financial difficulties.

Joller's main proposal was that in the first year — 2029 — the state would pay an additional €51 million to the Health Insurance Fund on behalf of children. The contribution would then increase each year, reaching €109 million annually by 2032 to cover children's healthcare costs.

Workforce covers healthcare costs for as many people again

Estonia's healthcare system is, as things stand, financed almost entirely through the social tax paid on the wages of working people by the employer. However, working people only make up around half the total number of people entitled to free health cover.

Children and young people under the age of 19 are, of course, entitled to free healthcare, including expensive dental treatment, despite no social tax contributions being paid on their behalf.

Minister Joller proposed in spring that the workforce should no longer have to finance the country's entire healthcare bill — especially children's treatment — through social tax contributions alone. Under this plan, from 2029 the state would start making additional payments from the state budget to the Health Insurance Fund to cover child healthcare.

The Health Insurance Fund continues to face a major financial shortfall. According to its original forecast, this year's budget is expected to end more than €100 million in the red, while in the coming years the fund will also have to draw on reserves accumulated in previous years.

In April this year, the Ministry of Social Affairs gave its assessment that, thanks to the worsening economic outlook, it is no longer certain that the reserves will last to 2029 as initially forecast. It noted that if the situation develops in line with the Ministry of Finance's spring economic forecast, the 2029 deficit will also be almost 50 percent larger than previously expected.

The material Joller presented to the government acknowledged that, given the current state of the budget and the focus on security spending, finding additional money for healthcare would be difficult, but argued that investing in people's health is also an investment in the economy and national security.

Minister leaves decision to next administration

Joller has now abandoned the proposal. At this fall's state budget strategy negotiations she will not be requesting state funds for that purpose, and has effectively left the decision to the next administration.

"The decision on this allocation will have to be made sooner or later. [...] Let the next government decide," the minister said.

While the government's website still contains the agenda for the April 30 cabinet meeting where the proposal was discussed, the description focuses primarily on funding children's healthcare from the state budget. Joller now says it was one of several proposals submitted to the government.

"It wasn't my main proposal this spring—it just may have caught your eye," she told ERR.

Joller did not answer ERR's question about the response her proposal received from the cabinet, noting only that each minister was allowed to present three priorities during the state budget strategy talks.

Funding on tech innovation still sought

One of the priorities for which the minister says she will be seeking funding this autumn is expanding the training capacity for doctors and nurses, as well as increasing the number of medical residents. According to the minister, this would cost the state between €5 million and €8 million per year.

"If we don't deal with this, we won't get anywhere. The second issue I'll be pursuing is focusing on digital innovation—whether we can, for example, introduce artificial intelligence into healthcare," the minister said.

Joller said she still wants €20 million a year from the state budget strategy from the year after next for healthcare digital innovation, saying the money should maintain the health information system instead of relying on the Health Insurance Fund until 2028. Her proposal is based on think tank the Foresight Center's "digital hope" scenario, which found that while upfront costs would initially exceed the benefits, the investment could deliver significant long-term efficiency gains.

Other input from Joller in April included criticism of significantly increasing the role of private healthcare insurance, and her ministry has also highlighted studies which show healthcare systems based on universal health insurance and solidarity in risk-bearing generally provide better access to healthcare services and greater health equality across population groups. Strongly promoting private insurance could create a parallel healthcare system which would divide society into those who could get top-notch services and those who would see a decline in service quality.

Also, private health insurance is often purchased by professionals, often younger people, and so does not correlate to those with the greatest healthcare needs, the ministry said. Increasing patients' out-of-pocket payments is not seen as the way forward either.

The ministry's conclusion was that private funding could be directed in a way that better supports prevention and health promotion.

As employers can currently provide up to €400 per year in tax-free health promotion benefits, a figure unchanged in almost a decade, the ministry noted that three-quarters of the money is spent on private insurance and medical services rather than prevention. Joller had also proposed reviewing the tax incentive to encourage genuine investment in employee health, and also considering indexing those tax-free health promotion benefits to inflation.

More detailed proposals on involving private funding should be completed by the end of the year, Joller told ERR.

Joller is not the first person to suggest a shakeup of child health coverage. Three years ago, one of Joller's predecessors as social affairs minister, Riina Sikkut (SDE), had already put forward the idea of applying to children the same logic which already applies to pensioners, with the state itself regularly paying a fixed amount to the Health Insurance Fund on their behalf. That system has been in place since 2018.

A table from the Ministry of Social Affairs shows that by allocating additional funding to the fund to cover children's healthcare costs, revenues and expenditures could be balanced by 2032.

Riigikogu elections take place in March, meaning another administration will enter office after that. Any decision on whether the state should begin directly financing children's healthcare will now fall to the next government.

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