Some comments on reforming the system of health insurance in Hungary

Kornai, J. (2008) Some comments on reforming the system of health insurance in Hungary. Acta Oeconomica, 58 (3). pp. 239-261. ISSN 0001-6373

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Abstract

Transforming the system of health insurance was on the reform agenda of the Hungarian government in 2007. Two alternative approaches were presented: to maintain the old state-owned single-payer scheme, or to introduce a multi-payer scheme based on the competition of private insurance companies. Finally a compromise was accepted. According to the draft legislation several insurance companies would enter, each of them based on a blend of public and private ownership.The paper presents a critique of this compromise scheme, discussing the advantages and shortcomings of various alternative approaches. It argues against mechanical, universal and too rapid changes, and advocates caution, experimentation and gradual changes.In spite of the warnings the law on health insurance reform was first accepted by the Hungarian Parliament, and then, a few months later, it was withdrawn.

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