Key differences among various drafts laws
on the introduction of mandatory health insurance

Volodymyr Rudiy, Ukrainian director of the project

In the Verkhovna Rada, Ukraine's legislature, there are currently circulating 4 bills that refer to the introduction of a system of mandatory health insurance:

• Bill No.4505 on mandatory state health insurance;
• Bill No.4505-1o on mandatory state health insurance;
• Bill No.3370 on financing public health services and health insurance;
• Bill No.3370-1 on mandatory health insurance.

In terms of their concepts, these 4 drafts can be divided into 2 groups:

Bill No.4505 and Bill No.4505-1 are based on the concept of social insurance and provide for the setting up of a single national health insurance fund. Bill No.3370 and Bill No.3370-1 are based on the concept of mandatory private (commercial) insurance and the creation of a competitive market for mandatory health insurance with the participation of many competing commercial insurance companies.

Bills No.4505 and No.4505-1 as a whole are practically identical, although there are some distinctions between them.

In particular, according to Art. 9 of Bill No.4505, the list of medical services to which insured individuals have the right are expected to be established by a separate law at the level of the Verkhovna Rada, whereas in Art. 8 of Bill No.4505-1 this list is to be submitted as the Basic Program of mandatory health insurance to be approved by the Cabinet of the Ministers.

Moreover, compared to No.4505, Art. 8 of Bill No.4505-1 makes an attempt to determine not only the list of services that will be paid within the health insurance plan, but also, very concretely, the list of services whose costs will not be covered by the healthcare plan. In addition, this latter list, additional sources of financing, other than mandatory health insurance, are also clearly noted.

Bill No.4505-1, in contrast to Bill No.4505, defines the status of the Health Insurance Fund. According to Art.15 of Bill No.4505-1, this Fund should be a public self-regulating non-profit organization, whereas in Bill No.4505 also declares that it should be a non-profit self-regulating organization, without clarifying whether it is state or non-government.

Other differences between the two bills are not essential.

The differences between Bills No.3370 and No.3370-1 are more significant.

Certainly, the biggest difference with Bill No.3370-1 is its attempt to legalize associated forms of self-insurance at the level of territorial communities. Bill No.3370 does not provide this.

In particular, Bill No.3370-1 provides for a self-insurance fund, "Likarniana kasa" or Wellness Fund on each territorial community and provides for mandatory payment of dues into this self-insurance society by every member of the territorial community. Moreover, the money accumulated in this self-insurance fund can be spent only to pay the family doctor who provides primary healthcare services to the members of the community, and to cover the expenses of this doctor. (In addition to the fees agreed by contract between the family doctor and a given territorial branch of Health Insurance Bureau of Ukraine, whose establishment is anticipated in the Bill and about which more follows below.)

As stipulated by Bill No.3370-1, the coverage of specialized and highly-specialized healthcare (secondary and tertiary care) will be handled through mandatory health insurance provided by competing commercial insurance companies who are members of the Health Insurance Bureau of Ukraine and the immediate local Bureau. At the same time, Bill No.3370 indicates that coverage of specialized and high-specialized medical services can be both at the expense of the Budget and at the expense of the actual health insurance.

The structure of Health Insurance Bureau of Ukraine includes two centralized insurance reserve funds:

• a state medical fund established by the State, represented by the Cabinet of the Ministers. This fund is intended to guarantee citizens free specialized healthcare and to co-pay highly-specialized healthcare within the limits of Budget funding;
• a non-state medical fund founded by commercial insurance companies with a license to provide medical insurance. This fund is intended to guarantee citizens highly-specialized healthcare to the citizen in medical facilities in the area where the patient resides, provided that there is a contract for such insurance with an authorized insurance company.
  

Thus, according to Bill No.3370-1, the Health Insurance Bureau of Ukraine should provide:

• partial coverage for primary healthcare, which is given by family doctors, to top up coverage through "Likarniana kasa" self-insurance at the community level (Art. 9-10);
• coverage of specialized healthcare and co-payment of highly-specialized health care within the limits of medical fund's budget (Art. 39, 41);
• coverage of provided highly-specialized healthcare by the non-state medical fund (in situations, where the finances and assets of a member insurance company being shut down or in bankruptcy are not enough liquidated to fulfill the insurer's obligations under a contract for mandatory health insurance (Art. 39, 41).
  

According to Bill No.3370-1, to form the specified centralized insurance reserve funds, a number of sources will be used:

• a portion of the revenues collected for mandatory social (not medical-Auth.) insurance;
• money from State Budget and local budgets allocated to public health services (except for State Budget money allocated to specific national programs in specific areas);
• the excise on tobacco and alcohol;
• the advertising tax on tobacco and alcohol;
• fines and taxes for environmental pollution;
• profit on transactions with securities that are the property of the Health Insurance Bureau of Ukraine;
• profit on temporarily free money on deposit at both the state and not-state medical funds;
• fees from insurance companies that join the Health Insurance Bureau of Ukraine (HIBU) (the amount shall be by the HIBU Coordination Council);
• deductions taken by insurance companies from insurance premiums for mandatory medical insurance (at a rate determined by the HIBU Council);
• fines for delayed deductions from mandatory health insurance premiums;
• money that is refunded to HIBU (when the Bureau has covered the insurance obligations of a member insurer, for highly-specialized healthcare provided by medical facilities to insured patients).
  

However, Bill No.3370-1 does not clearly differentiate, which of these sources are intended for the state fund and which for the non-state fund.

In addition, Bill No.3370-1 (as opposed to Bill No.3370) does not anticipate direct regulation of the sizes of insurance payouts and maximum rate charges, leaving the determination of these very important issues to the competence of the Health Insurance Bureau of Ukraine. The Bill similarly delegates to HIBU the determination of procedures and conditions for establishing centralized insurance reserve funds.

One of the negative features of Bill No.3370-1 that distinguishes it from Bill No.3370 is that, even in general terms, it does not allow the extent of medical care that an insured person can expect to be covered, to be clearly determined. And Bill No.3370-1 does not provide-even in general terms-any guidelines for how to estimate the value of medical care given to an insured person.

One more distinctive feature of Bill No.3370-1 is that this Bill permits any insurance company with the appropriate license to provide health insurance (at the same time, Bill No.3370 permits only specialized medical insurance companies, and they have no right to provide any other kind of insurance other than mandatory and optional health insurance, optional accident insurance, and optional sickness insurance).