Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

Sickness Insurance (Industry) Convention, 1927 (No. 24) - Hungary (Ratification: 1928)

The Committee notes that the Government’s report has not been received. It must therefore repeat its previous observation which read as follows:

Article 6 of the Convention. Participation of representatives of the insured persons in the management of insurance institutions. Referring to its previous comments, the Committee notes the information provided by the Government in its report as well as the comments on the application of the Convention put forward by the employees’ representatives in the National ILO Council. The Committee recalls that the supervision and management of the National Health Insurance Fund was transferred to fall under the Government’s competency by Act No. XXXIX of 1998 following a decision of the Constitutional Court. The Court concluded that, given the level of unionization, the employees’ national representative organizations lack the democratic legitimacy required to be entrusted with representative functions of the insured. Subsequent to this ruling, the role of the social partners became limited to participation in the supervision of the health insurance fund within the tripartite Control Board of Health Insurance. In 2006, however, Act No. CXVI on the Supervision of Health replaced the above Control Board by the Health Insurance Supervisory Authority, the management of which is appointed by the Government. The social partners retained only the right to nominate two out of the seven independent members of the Surveillance Council appointed by the Government in their individual capacity to assist the Health Insurance Supervisory Authority.

According to the employees’ representatives in the National ILO Council, the Act No. CXVI of 2006 on the Supervision of Health Insurance is not in conformity with Article 6 of the Convention in so far as it does not allow the participation of insured persons in the administration of the national health insurance institution. While the Health Insurance Supervisory Authority is assisted by the Surveillance Council, this body is not involved in the management, but in the control and monitoring of the health insurance institutions. There can be no reason to exclude national level social partners and the insured represented by them from the management of health insurance. All the parties concerned should therefore seek a method in line with Hungarian constitutional requirements which would allow the involvement of employers’ and employees’ organizations actually representing the insured in the management of the health insurance institutions, in compliance with the provisions of the Convention.

In its response, the Government states that the overall reorganization of the health insurance system has started with the submission of Bill T/4221 on the health insurance administration offices, which seeks to replace the National Health Insurance Fund (OEP) by funds that would give substantial decision rights to private investors, even though the State would still retain the majority participation. The Bill establishes the Tariff Committee and the Quota Committee which are responsible for submitting proposals regarding the modification of the content of the health insurance package and on the extent of the quota per person due. Each Committee will be composed of five members, three of which are appointed by the Government and two by the health insurance funds. To make recommendations to these Committees, the Government considers it essential to, after the adoption of the Bill, establish separate consultative bodies composed of persons delegated by all trade unions concerned. The Tariff and the Quota Committees might thus become major players in the field of health insurance, because they would have the right to make proposals affecting the operation of the health insurance system in consultation with the social partners.

While the reform of the national health insurance system is far from complete, the Committee observes that at present social partners have been moved away from the management of the insurance institutions and have no real role to play in representing the interests of the persons protected. No representation of the insured persons is foreseen in the management of the health insurance funds to be set up under Bill T/4221. The Committee warns that splitting the single National Health Insurance Fund administered by the public authority into a multitude of semi-privatized funds where private investors are given substantial decision rights, whereas the representatives of the insured are excluded from management, raises governance concerns for the health insurance system. In the current period of transformation of the national health insurance system, the Government states that it is unable to declare along which principles the new system will be elaborated and is now examining the roles that the employer and the employee sides could play in the operation of the new system. In this situation, the Committee would like to once again draw the Government’s attention to those principles of the participatory management of sickness insurance, which were laid down in Article 6 of the Convention as early as 1927 and upheld since in many subsequent international and European social security instruments. These principles require the Government to conserve its overall primary responsibility for the proper administration and functioning of the institutions and services involved, to assign and promote a strong role for the social partners, to guarantee an effective representation of the insured persons as well as to ensure close supervision of private investors. In view of the importance of these principles for the good governance of social insurance, the Committee would like the Government to explain to what extent they are being followed in the current reform of the health insurance in Hungary.

The Committee hopes that the Government will make every effort to take the necessary action in the very near future.