Health Systems in Transition - Hungary - World Health Organization ...

Health systems in transition Hungary 177
Revenue collection
Various government programmes between 2002 and 2010 have focused on
establishing a registration and monitoring mechanism to check whether patients
had actually paid the necessary HIF contributions and were thus entitled to
obtain health care services (Government of the Republic of Hungary, 2006).
The system that was ultimately introduced in 2006 is located on site with the
providers, who have thus assumed the monitoring function. Importantly, even if
they have not paid their HIF contributions, patients cannot be denied necessary
care; instead, the patients and the Tax Office are notified about the case for
further proceedings (for more details see subsection Breadth of coverage in
section 3.3.1). Despite problems related to delayed communication between the
NHIFA and Tax Office, several reports published by the NHIFA and the State
Audit Office show that the share of the population with an unclear registration
status has declined to 3% (State Audit Office, 2008a).
In 2005 a new type of hybrid tax/contribution called a “simplified
contribution payment” was launched. It applies to individuals and small
entrepreneurs working in media or in the arts and earning below a certain
income ceiling (2005/6). Instead of paying regular HIF contributions or income
tax, the employees and, when applicable, employers in these occupational
groups pay a preferential contribution rate (see subsection General government
budget in section 3.3.2). The stated aim of the measure was to support free
debates of public issues in the media and arts, and to promote freedom of
artistic activity. The HIF collects 1.8 billion HUF (around €6.5 million) from
this source annually, which amounts to about 0.1% of its total expenditure. This
measure well characterizes the fragmentation of revenue collection in a system
in which the government applies policy measures that have little to do with
overall health system goals.
Since 2006, deep cuts in the HIF contribution rate paid by employers have
led to a shift towards funding through general taxation, as has a redefinition
of the central government contribution to the HIF using a new formula to
account for non-contributing social groups (2007/11) (see section 3.3). Whereas
in the late 1990s employer contributions accounted for 73.6% of HIF revenue
(versus 11.3% for employee contributions), they accounted for only an estimated
16.1% (versus 29.6%) in 2010. Furthermore, the lump-sum component of the
hypothecated health care tax was eliminated in 2010. At the same time, the
total transfer from the central government budget, including deficit financing,
is estimated to be almost five times higher in 2010 than it was in 1997. In short,
general taxation has become as important as wage-related contributions as a
source of revenue in the Hungarian health care system (see section 3.2).