ARMENIA: new health tax to attract additional resources into healthcare to be introduced

5 December 2019 — Marina MAGNAVAL
According to the Minister of Health of Armenia, Arsen TOROSYAN, the healthcare sector needs additional resources in the amount of AMD 150 billion (~EUR 283 million); the new health tax of 6% on the wages of the working population might be the source of that, ArmInfo reports.

The minister explained that, based on the draft of the state budget for 2020, the budget allocation for healthcare will make up about AMD 109 billion. However, most of the population continues to pay for medical treatment on their own. According to the ministry, about AMD 250 billion are needed to ensure coverage for all citizens of the country (~3 million people). If between 2020-2022 the budget in this area increases by AMD 10-20 billion annually, then in 2022 the health tax will decrease from 6% to 4% of the salary.

"We are just proposing a new mechanism for collecting and distributing these funds in a more efficient and fair way, that will provide the state with more good results", said TOROSYAN. According to the concept of implementation of universal health insurance (UHI) in Armenia, the system should cover the entire population and the services will be differentiated depending on the age and gender. This way, the average cost of annual insurance coverage per beneficiary will amount to AMD 77,274 (~EUR 146), which will be compensated from the budget revenues and the new health tax.

The ministry explained that the new tax will cover over 41% of the working population having a monthly income of AMD 150 thousand and higher (~EUR 283). For the remaining 59% of the working citizens, the effect of the new tax will be mitigated by the introduction of a flat tax scale. "The proposed system is a social security system, and is not for development of financial markets", the minister added. At the same time, the process of introduction of UHI itself will require AMD 229.1 billion, ArmInfo writes.

*EUR 1 = AMD 529.84 (04.12.2019)

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