Health Insurance of Emigrants in Bulgaria or How the State Blackmails Its Citizens

At the beginning of 2005 tens of thousands of emigrants started a campaign against the mandatory health insurance system based on the principle of citizenship, which is legally set in Bulgaria and as such is a precedent for the rest of the world. The great scale of the action results from the large number of the emigrants, but despite the active position of those citizens who directly bear the consequences of the regulation and their prepositions for a justified amendment of the law and the analysis provided, there is no result until now. On the contrary, the amendments that have been made in the regulation framework of the health insurance system are unclear and leave a room for discretion, injustice and inefficiency.

Retrospection of the events

On the first March 2005 Paris News Edition initiated a subscription list against the mandatory health insurance payments for the Bulgarian emigrants. They wanted to change the law in such a way that the Bulgarians who live abroad not to be obliged to pay health insurance taxes in Bulgaria during the period of their living outside the country.

In May 2005 there was an amendment of the Law on Mandatory Health Insurance, which allowed a small number of the emigrants to be relieved from the duty to pay health security taxes after 2005. However, these Bulgarians have to pay social security taxes in the country they live in and they should also pay their accumulated obligation during the period between 2000 and 2005 in Bulgaria.

In an open letter to the president of Bulgaria Georgi Parvanov published on 10 May 2005, Bulgarian emigrants wanted to reverse the law amendment. They cited two main problems:  

• First, according to the law, there is a provision for relieving future obligations only in case emigrants pay health security tax in the country they live. This means discrimination of the citizens which is against the Constitution.  

• Second, the cumbersome bureaucratic procedures and endless administrative rules. The declarations that should be sent to NOI (National Security Institute) cannot be downloaded from the Internet. The emigrants have to declare that they have not used the state health insurance system for the period they have lived aboard.    

Not even a single step forward has been made towards greater efficiency and better functioning of the system in order to facilitate the citizens. Once again it seems that the government heads are lead by the presumption that the main activity of the Bulgarian citizens, the emigrants in particular, is to follow closely the laws, to pay for services they have never used, to fight against all bureaucratic obstacles and lose their time meanwhile.

A stress should be laid also on the fact that the law limits the ability of people to choose the set of rules under which to live. Once born in Bulgaria, a man is deprived of the opportunity not to pay mandatory social security even if he decides to live in a country where no such system exists.

What is the result of the open letter and the campaign that has been supported by tens of thousand of signatures? The government not only has not changed the law, but made up new “incentives” for paying the security taxes. Every Bulgarian emigrant who has had the imprudence to choose a GP in Bulgaria and has not changed his citizenship has received a letter by NOI at the end of last year, for the sum he owes, together with the accumulated interest payments. The sums are different for each case, but for a period of 5 years, it is about 1000 leva. According to data by NOI, only 25 000 people or around 5% of emigrants have not chosen a GP and as such are not liable to pay social security taxes. 

If the Bulgarian emigrants do not pay their “obligation” or do not appeal against it, the state has the right to distrait their bank accounts and to confiscate their property. What is more, a discussion is widely spread in Bulgaria for the possibility of the state to be able to take away passports on the boundary of citizens who have not paid their security bills.  

Findings

The major finding is that the state acts as an aggressor that uses coercion and does not observe even the basic human rights of movement and private property. The case does not even consider whether the emigrant has ever used or will use the health security service. At the same time, he has no right to reject it as the duty is imposed retrospectively on past periods.

Surely, it may be the case that some percentage of the emigrants has used the state health security system without paying for it but this number cannot be estimated and even so, it cannot be a justification for the existing regulation. We are far away from the belief that even an effort is made for a cost-benefit analysis of the law on health security. Benefits for the state include accumulating of resources from “debtors”, while the costs are: (1) expenses for writing and sending the letters, (2) opportunity costs because a part of the emigrants may prefer to stay abroad or to minimize the period of their stay in the country for a danger of having their passports or even property taken away and thus, they will not spend the money they have saved abroad in Bulgaria.

From a macroeconomic point of view, the emigrants are net lenders for the country and the item “Net Transfers from Abroad” has a positive balance and together with Foreign Investments accounts for much of the positive trends in the balance of payment. According to data from BNB (Bulgarian Central Bank), Bulgarians abroad have returned in the country about 616 million Euro for the first 10 months of 2005. Having in mind the multiplication effect of the money, these resources are an important factor and a catalyst for the upsurge of the Bulgarian economy. 

Besides the appeal for a change in the law and the particular paragraphs discussed so far, the general faults of the existing health system should be detected. Its main defect is that fact that it is ruled in a bureaucratic manner by state officials which inevitably leads to inefficiency and decision making based on personal and policy interests and intrigues rather than profit seeking.

The mandatory health insurance is a collective fund that accumulates its assets by taking money away from the citizens in the form of social security taxes. This way of functioning of the system, without incentives and entrepreneurial approach in managing the fund, is doomed to failure. Blackmailing people as a means of collecting revenues for the state system is impermissible and is a direct result of the faulty design of the health insurance system. Payment for the health services should be made on the base of services used, not on the principle of citizenship.