"Zhoghovurd" daily writes:
"Zhoghovurd" daily newspaper continues to study the process of introducing comprehensive health insurance in Armenia and the purposeful use of financial resources involved for it.
We are talking about the successful loan agreement "Implementation of the Universal Health Coverage Program", by which, according to the official answer, "a loan worth 102,000,000 euros" is provided to Armenia.
Free treatment is done on credit It is clear from the response of the state body that the government is trying to advance this large-scale healthcare initiative not at the expense of its own budgetary resources, but with debt. And this in itself raises a serious political and social question. if the government promises people an insurance system, a reduction in the financial burden of medical care, in fact, more accessible or "free" treatment, then why did it take the path of taking a new loan to implement that system?
Even more so, when the country enters a politically sensitive period and approaches the pre-election stage, the question becomes more than natural, whether this big social promise presented to the citizens is built on long-term financial stability, or on a mechanism formed with credit funds, which can also serve the purpose of generating pre-election expectations.
This is a question that the state is obliged to answer not with propaganda, but with detailed financial calculations.
Paused Clarification: No numbers In response to the inquiry of the "Zhoghovurd" daily newspaper, it was reported in an official letter that "the fruitful loan agreement "Implementation of the Universal Health Coverage Program" was signed on July 25, 2024 between the Republic of Armenia, represented by the Minister of Finance of the Republic of Armenia, and the International Bank for Reconstruction and Development, by which it is planned to provide a loan worth 102,000,000 euros to the Republic of Armenia."
According to the same answer, "The objective of the program is to improve the quality and implementation of primary medical care, to increase the efficiency of the Borrower's health care costs and to reduce financial barriers to accessing health services." On paper, these formulations sound attractive, but that's where the problem lies. the state presents big goals, but does not reveal the most important numbers.
In particular, the response to the survey lacks clear information on how much of the 102 million euros will be directed to the launch of the Comprehensive Health Insurance, how much will be spent on improving primary care, how much will be allocated to information systems, consulting services, trainings or project management and maintenance. Instead, only the structure of the program was presented, stating that it consists of the following parts:
"Outcome area 1: Improving the quality of medical care", "Outcome area 2: Increasing the efficiency of the borrower's health care costs", "Outcome area 3: Reducing financial barriers to using health services".
In other words, the general directions are mentioned, but not their price. And without it, it is impossible to understand whether it is actually about the financing of the insurance system or about a broad program distributed in different directions of health care, within the framework of which the subject of insurance is just a politically beneficial title.
Floating interest, up to 2049 payments According to the official explanation, the terms of the loan are as follows. "Loan amount: EUR 102,000,000", "Loan rate type: floating", and "Loan annual floating rate: 6-month EURIBOR + floating spread, 16.08.2024". currently it is 4.577% (3.367% + 1.21%)".
In addition, "Commitment fee: annual rate of 0.25%", as well as "One-time commission fee, in the amount of 0.25% of the loan amount" are defined. According to the loan repayment terms: "Loan repayment period: 25 years, of which the preferential one is 15 years", and "The repayment of the principal amount will be carried out starting from 2039. from July 15 to 2049 on January 15, in equal installments of 5% of the loan amount.
Here another important circumstance becomes clear. In the name of health care reform, a long-term debt is taken on, the burden of which will remain for years. In other words, today citizens are presented with a promise of expanding social protection, but its financial consequences are transferred to the future in the form of public debt.
In the answer, it was also emphasized separately that "The credit program is effective, that is, in order to achieve the indicators related to the allocation defined by the Program, the funds will be allocated from the state budget, and upon reaching them, the World Bank will allocate the funds, they will be directed to the state budget and not directly to the Ministry of Health."
Credit goes into the budget, goes out to hospitals This is an important detail, because it turns out that the money does not go directly to the health department, but goes to the state budget.
And this is where the main problem of transparency arises. if the funds are entered into the budget, then the public should know exactly what results were deducted, what amount of money has already been deposited, and especially, in what directions these funds have been spent.
Meanwhile, the official response only mentions that "The program is currently in the implementation phase and deductions have already been made for the indicators that were made by the Ministry of Health. The project will end in 2029."
However, it is not said that the indicators have been fulfilled, how many euros have already been allocated, which line of the budget these funds went to, and how much of them was directed to the very idea in the name of which this entire reform is being presented to the public: comprehensive health insurance. Why 102 million euros? There is no calculation. It is also particularly noteworthy that the state did not answer one of the most delicate questions: why exactly the amount of 102 million euros was chosen. No calculation, justification or methodology was presented as to how this number was formed.
Did it come from actuarial assessments of the insurance system, the expected volume of medical services, the cost of re-equipment of the primary care unit, or was it simply the result of negotiations with an international partner? This question remained unanswered. And here is the main contradiction. on the one hand, the public is presented with a promise of a radical reform of the healthcare system, which should reduce people's out-of-pocket payments and make medical care more accessible, on the other hand, the government does not reveal what the real financial basis of this promise is.
It does not say how much money goes to the insurance package itself, how much goes to the accompanying costs, and especially how sustainable this program is without new debts and further additional budget injections. A worrying picture is obtained. it is possible that the state is trying to use credit funds to launch a system that is presented to the public as social progress and relief of medical expenses for people.
But if the basis of that system is not a long-term calculated, self-sufficient financial model, but foreign credit, then the question arises whether this is a healthcare reform or a package of social promises, which can serve political purposes, especially on the eve of the pre-election period. Of course, this claim has not been officially confirmed, but it is the government's incomplete clarifications that give rise to such doubts.
Because when the state takes a loan of 102 million euros, but does not explain its internal structure, does not publish the exact distribution and does not show which part will go directly to insurance costs, public mistrust becomes a natural consequence. The response of the state body clarifies only the external scope of the loan: "102,000,000 euros" amount, "floating" interest rate, 25-year repayment period, project ending in 2029.
But it does not answer the main question: how much of this credit will serve the very purpose for which it is politically presented to the public: the introduction of comprehensive health insurance and the reduction of the financial burden of citizens' treatment.
In other words, the government has taken another loan to fulfill the promise of "free treatment" or more affordable medical care, the political beneficiary of which is the current government, and the financial burden will remain on the shoulders of future taxpayers. As long as the detailed allocation of funds, the amount of deductions made, the result indicators and the financial model of the insurance are not published, this agreement of 102 million euros remains not a fully transparent social reform, but a state obligation burdened with many open questions.
