Private health insurers are calling for public entitlement to health services to continue as a tax-based system, with private health insurance as a complementary system, insisting that private insurance could never offer an equitable society-wide system if it were to replace it.
The Malta Insurance Association, which represents the sector, is awaiting a meeting with Finance Minister John Dalli to discuss his plans for financing health services. It has drawn up a position paper in which it has ruled out the viability of the burden of healthcare funding being shifted onto it.
Last November, Mr Dalli had caught the health insurance industry unawares with his announcement that private health insurers would have to pay for medical treatment, and that the premiums would eventually be offset against their state contributions.
"We are proposing that in the case of health insurance, this scheme should be developed in such a way that each person in Malta would be insured. This means that, if a person is not paying social security contributions, a way would have to be found for him or her to still be covered by insurance.
"All those who have private health insurance, which is approved, would pay for the relevant costs for health services from this private insurance. At the same time, their contributions to the government schemes could be reduced over a period of years according to circumstances, until they would no longer pay any government contributions," he said in the budget speech.
This brief statement was the first indication by the minister that the government was looking at alternative methods of financing the health service.
At present, the health service is funded out of general taxation through the consolidated fund. No taxes are specifically earmarked for health care, as is the case overseas with, for example, tobacco taxes. Although in theory, when it was first introduced, the national insurance fund was supposed to provide for health care coverage, this did not happen in practice.
With the welfare gap growing, and health costs spiralling, the government has been under pressure to find alternative ways of funding the service and making it sustainable. A conference organised by the Foundation for Medical Services and the Forum of Healthcare Professions in 2000 had outlined a number of possible scenarios, including a hypothecated health tax of compulsory health insurance, and cost-sharing between the government and the patients.
The debate on health financing is by no means limited to Malta. The UK is currently reviewing its funding of the National Health Service, and recently concluded that its present system - which is similar to Malta's - made sense, when compared to social insurance systems like France and Germany.
The MIA is adamant that the sector could not sustain any further liabilities. Health insurance premiums in 2001 totalled Lm5.4 million, while expenditure on claims reached Lm4.8 million. When acquisition and administration costs are taken into account, the sector actually makes a loss, it is argued.
The MIA has made a number of proposals on ways to encourage more take-up of private health insurance, although it insists that insurers could not replace public funding.
Around 20 per cent of the Maltese population have health insurance but only a quarter of these have an extensive refund local hospital plan.
One measure would be for the government to offer tax rebates on premiums, an electoral promise that has not yet been honoured.
It also believes that there should be more controls over the supply side, through cost control and a tariff on medical treatment.
The MIA also suggested cost-sharing, with patients paying in part or in full for certain procedures and treatments.
On the policy level, however, the main thrust of its stand is that a privately financed insurance system cannot substitute a state health care system, but should only complement it.
"Good health is perceived as an important social goal, and there is a general expectation that public financing should continue to form an essential part of government policy. Denying access (unless upon payment) to public health facilities will be seen as draconian to the Maltese electorate, and will be a disincentive to continue, let alone purchase a new private health insurance cover," MIA said in its position paper.
"Private insurance leads to risk selection, while state healthcare is based on solidarity. The two goals are not easily reconcilable. Risk selection increases premiums charged to the sick and lowers that charged to the young and healthy. Solidarity has the young and healthy people pay the greater part of the cost of healthcare for those who are old and sick. Solidarity is achieved through a tax-based system, rather than private insurance.
"Private healthcare insurance is no substitute to state healthcare because many health services fall outside its remit. These include health care in respect of chronic and pre-existing conditions, palliative and routine/screening tests, as well as drug abuse, self-inflicted injuries, out-patient drugs and dressings, HIV/Aids, infertility, normal pregnancy, preventive treatment and screening, kidney dialysis, mobility aids, organ transplant.
"Moreover, private insurance covers unforeseen events and not long-term care, maternity care and screening programmes."
The MIA also argued that there was more control over expenditure in a centrally funded system than in a fragmented, insurance based one.
Another important aspect highlighted by MIA spokesmen was the need for regulation, greater transparency, better communication between private and public health service providers, and the introduction of tax incentives.