Perspective Chapter: Creating and Dismantling Social Health Insurance in Hungary – Causes and Consequences

Abstract

In the early 1990s, as part of the political transition, a comprehensive reform of the Hungarian health system was launched, including the transformation of tax-based financing into a social health insurance (SHI) system. The SHI was financed by contributions paid by employers and employees and operated by a newly created institution, the National Health Insurance Fund Administration (NHIFA), which enjoyed considerable independence. In 2008, there was a short-lived attempt to replace the single-payer, public institution model of the SHI with a system of competing private health insurers: the parliament passed the relevant law, only to repeal it a few months later. In the 2010s, the health system underwent radical changes as part of the overcentralisation of the entire public administration. All the basic elements of the SHI system were abolished, and the essential powers of the NHIFA were taken over by the government. This chapter describes these radical changes in the health financing system and reveals the political and economic reasons behind them, as well as their impact on the performance of the Hungarian health care system.