Health insurance quality in Latvia decreases with inflation

Despite rising prices, demand for health-insurance policies is stable and even with slightly upward rates. However, policy coverage is falling, so either there are fewer services paid for, or customers' co-payments increase, Latvian Radio reported on July 31.

Demand for health-insurance policies is strongly positive, according to the head of the Latvian Association of Insurers, Jānis Abāšins.

“If we look at inflation and at policy prices, then there's a more difficult situation. Because medical care is the area where inflation is basically every year. And right now the inflation is pretty strong, which means... There is a love triangle between a client who wants to pay less and get more, between an insurer who wants to earn anyway and a medical institution that also wants to earn and is forced to raise prices gradually,” Abāšins said.

The consequence is that some customers receive lower-value policies with a larger client co-payment. Chairman of the board of Health Center 4 network (VC4), Māris Rēvalds, acknowledged that the quality of insurance policies is declining.

"When you raise service prices, the same compensation frame can fit less and less. And that's the problem, in fact, these insurance products degraded to some extent. This is related to another very important regulation: in order to make it beneficial for an employer to insure a worker, he can do it for a certain amount, which is about €420 per worker. If the employer exceeds that amount, then he has to pay additional taxes, and the insurance becomes unaffordable," Rēvalds said.

Employers and politicians have been speaking intensively about this rule for a year now, but no solutions have been found.

Lawyer, associate professor at the University of Latvia, Solvita Olsena, believes that the public sector, with the purchase of private health insurance policies, shows a bad example of state management.

“(..) Because the problem with private policies is that a lot of that money goes into not the big centers where we have that complicated health care, but it goes to private medical facilities that live well enough. It does not come, for example, to the Stradiņš or East Hospital, which we desperately need, but to some clinics, and remains there. But I [the customer] am not interested in developing a private clinic. I'm very interested in making sure that when I have a major issue, I have a well-equipped and workable hospital,” Olsena said.

On the other hand, as regards the increase in policy rates, the expert mentioned a classic problem: people receive fewer health services, and most harshly it affects the less wealthy because paying higher margins for the solvent is not so problematic.

Photo: Freepik stock images, jannoon028