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

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The Committee notes the observations of the employees’ representatives on the National ILO Council, communicated with the Government’s report.

Article 6(2) of the Convention. Participation of insured persons in the management of sickness insurance institutions. In its previous comments, the Committee noted that over the previous reporting period, several changes had taken place with respect to the involvement of insured persons in the oversight of the management and operation of healthcare providers. It also invited the Government to provide further details regarding the manner in which the national law and practice ensured compliance with Article 6 of the Convention, indicating in particular how the participation of insured persons in the management of health insurance institutions, including through trade union organizations representing the interests of insured employees, was guaranteed and how it operated in practice. The Committee notes the Government’s reply in its report indicating that the participation of insured persons in the work of regional healthcare councils is ensured by the representation of patients’ organizations in these councils. Regional healthcare councils are composed of the representative of the municipality of the given region, the representative of the competent health insurance body, one representative of the non-publicly funded healthcare service providers operating in the region and participating in basic healthcare services, one representative of each professional chamber operating in the area of healthcare, respectively, and one joint representative of the patients’ organizations operating in the region. The Government further indicates that the Ministry of Health liaises with the National Patient Forum, an advisory body composed of civil organizations representing patients suffering from the same disease, which also contributes to the representation of insured persons in decision-making processes. The Committee takes due note of this information. The Committee also notes the comments put forward by the employees’ representatives on the National ILO Council, which, as in the past, raise concerns as to the lack of harmonization of the law with Article 6 of the Convention concerning, notably, the participation of insured persons in the management of sickness insurance. They also consider that patients’ organizations are not sufficiently represented in regional health councils, which account for only one representative of patients’ organizations. Based on the above, the Committee is bound to note once again that, while representatives of insured persons are involved in a consultative capacity in the policymaking and supervision of health protection issues, additional clarification is needed on the manner in which their participation in the management of health insurance institutions is ensured, as required by Article 6(2) of the Convention. The Committee thus requests the Government to indicate how, since the restructuring of the health insurance system, the participation of insured persons in the management of health insurance institutions is guaranteed by law and how it is given effect in practice.

The Committee has been informed that, based on the recommendations of the Standards Review Mechanism (SRM) tripartite working group, the Governing Body has decided that member States for which the Sickness Insurance (Industry) Convention, 1927 (No. 24) is in force should be encouraged to ratify the more recent Medical Care and Sickness Benefits Convention, 1969 (No. 130), or the Social Security (Minimum Standards) Convention, 1952 (No. 102), accepting Parts II and III (see GB.328/LILS/2/1). Conventions Nos 130 and 102 reflect the more modern approach to medical care and sickness benefits. The Committee therefore encourages the Government to follow up the Governing Body’s decision at its 328th Session (October–November 2016), approving the recommendations of the SRM tripartite working group and to consider ratifying Conventions Nos 130 or 102 (Parts II and III) as the most up-to-date instruments in these subject areas.

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Article 6 of the Convention. Management of sickness insurance institutions. With reference to its previous observation, the Committee notes the Government’s statement that, during the reporting period, several changes have taken place with respect to the involvement of insured persons into controlling the management and operation of health-care providers. Overall, health services continue to be purchased by the National Health Insurance Fund from health-care providers operating within the social insurance scheme. From 2007 to 2010, the Health Insurance Supervisory Authority was responsible for overseeing the functioning of the health insurance system and was assisted by a supervisory council composed of seven members including representatives from employers’ and employees’ sides. During the period 2009–11, the National Health Council (NHC), a consultative, advisory and reviewing body, supported the Government’s decision-making with respect to health policy and implementation. The NHC included among its members national representative bodies of patients. Starting from 2012, health regions have been established together with regional health councils which cooperate in health policy-making and assume certain responsibilities for the monitoring of the health policy at the regional level. These councils are composed of, inter alia, a representative of patients’ organizations at local level. In parallel, the Government also refers to the National Patient Forum – an advisory body composed of civil organizations representing patients suffering from the same disease. Taking into account the above, the Government states that the insured persons participate in decision-making processes related to health insurance through their right to be consulted and in contact with the responsible minister.

Taking due note of this information, the Committee would like to recall that Article 6 of the Convention aims at, on the one hand, guaranteeing that health insurance is administered by self-governing institutions under the administrative and financial supervision of the State, and that, on the other hand, the insured persons participate in the management of these self-governing institutions. The Committee notes that while it appears from the above information that representatives of insured persons have been and continue to be involved in a consultative capacity at the level of policy-making and supervision of health protection issues, the report does not state clearly how the participation of representatives of insured persons in the management of health insurance institutions operates. The Committee recalls in this respect that the employees’ side within the National ILO Council had in the past raised continuous concerns over the fact that existing mechanisms fail to ensure their participation in the management of health insurance institutions. The Committee therefore invites the Government to provide further details regarding the manner in which the national law and practice ensure compliance with Article 6 of the Convention, indicating in particular how the participation of the insured persons, including through trade union organizations representing the interests of insured employees, in the management of sickness insurance institutions is guaranteed and how it operates in practice.

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With reference to its previous observation, the Committee notes with interest that Act I of 2008 on health insurance offices based on Bill T/4221, which aimed at privatizing health insurance funds and moving the social partners away from participation in the management of these funds, has been repealed by Act No. XXIV of 2008. The Government reports that the reason for repeal was that the health model specified in this Act has led to discord in the political, social and professional opinions.

According to the Government, given the current economic and political situation, the reform of health insurance management is no longer a topical issue in Hungary. The Committee invites the Government, in its next detailed report on the Convention due in 2012, to explain its plans or proposals for the future model of health insurance management in Hungary. The Committee further invites the Government to explain its plan to administrate sickness insurance in line with Article 6 of the Convention.

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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.

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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 Government is asked to reply in detail to the present comments in 2009.]

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The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

The Committee notes the information provided by the Government in its latest report. It also notes the comments put forward by the employees’ representatives in the National ILO Council, which discussed the report, and the reply made by the Government in this regard.

According to the employees’ representatives, by terminating the social insurance self-government and thus placing sickness insurance under the control of the Government, effect is not given to Article 6 of the Convention. This provision of the Convention only allows the direct administration of sickness insurance by the State as long as its administration is rendered difficult or inappropriate by reason of the insufficient development of the employers’ and workers’ organizations. The employees’ representatives stressed that employers and employees have equally been formed and are operational at the national level. In these circumstances, the conditions are fulfilled to allow the functioning of the self-government institutions.

In its reply the Government stated that the supervision and management of the National Health Insurance Fund has been transferred under the Government’s competency by Act No. XXXIX of 1998 following a ruling of the Constitutional Court. Having investigated the legitimacy of self-government, the Constitutional Court stated in its resolution No. 16/1998 that “entrusting the delegation process on the employees’ national representative organization is not, at the current level of unionization, adequate to ensure the legitimacy to insurance representatives required by section 2 of the Constitution”. The Government sets out the reasons that led the Constitutional Court to their conclusion as to the lack of democratic legitimacy of the organizations. The Constitutional Court’s resolution did not judge unconstitutional in itself the creation of social insurance self-government through delegation; it considered that the task of the legislature is to create regulations that ensure democratic legitimacy. The Government adds that in the absence of appropriate legislation the situation has not changed even after the Constitutional Court’s resolution and therefore the conditions for creating legitimate self-government do not apply in the health insurance system.

The Committee notes this information. It asks the Government to ensure that, in accordance with Article 6 of the Convention, the sickness insurance scheme is administered by self-governing institutions and that the insured persons participate in the management of these institutions. The provisions of this Article do not exclude the possibility that the administration of the said institutions shall be under the administrative and financial supervision of the competent public authorities. The Committee expresses the hope that in accordance with the Constitutional Court’s resolution the Government will take the necessary steps to enable the adoption of the appropriate regulations. It asks the Government to indicate any progress made in this regard.

In addition, the Committee would be grateful if the Government would supply a copy of a translated version of Act No. LXXXIII on the services of the compulsory health insurance and its regulations, if available.

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The Committee notes the information provided by the Government in its latest report. It also notes the comments put forward by the employees’ representatives in the National ILO Council, which discussed the report, and the reply made by the Government in this regard.

According to the employees’ representatives, by terminating the social insurance self-government and thus placing sickness insurance under the control of the Government, effect is not given to Article 6 of the Convention. This provision of the Convention only allows the direct administration of sickness insurance by the State as long as its administration is rendered difficult or inappropriate by reason of the insufficient development of the employers’ and workers’ organizations. The employees’ representatives stressed that employers and employees have equally been formed and are operational at the national level. In these circumstances, the conditions are fulfilled to allow the functioning of the self-government institutions.

In its reply the Government stated that the supervision and management of the National Health Insurance Fund has been transferred under the Government’s competency by Act No. XXXIX of 1998 following a ruling of the Constitutional Court. Having investigated the legitimacy of self-government, the Constitutional Court stated in its resolution No. 16/1998 that "entrusting the delegation process on the employees’ national representative organization is not, at the current level of unionization, adequate to ensure the legitimacy to insurance representatives required by section 2 of the Constitution". The Government sets out the reasons that led the Constitutional Court to their conclusion as to the lack of democratic legitimacy of the organizations. The Constitutional Court’s resolution did not judge unconstitutional in itself the creation of social insurance self-government through delegation; it considered that the task of the legislature is to create regulations that ensure democratic legitimacy. The Government adds that in the absence of appropriate legislation the situation has not changed even after the Constitutional Court’s resolution and therefore the conditions for creating legitimate self-government do not apply in the health insurance system.

The Committee notes this information. It asks the Government to ensure that, in accordance with Article 6 of the Convention, the sickness insurance scheme is administered by self-governing institutions and that the insured persons participate in the management of these institutions. The provisions of this Article do not exclude the possibility that the administration of the said institutions shall be under the administrative and financial supervision of the competent public authorities. The Committee expresses the hope that in accordance with the Constitutional Court’s resolution the Government will take the necessary steps to enable the adoption of the appropriate regulations. It asks the Government to indicate any progress made in this regard.

In addition, the Committee would be grateful if the Government would supply a copy of a translated version of Act No. LXXXIII on the services of the compulsory health insurance and its regulations, if available.

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The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which reads as follows:

The Committee notes from the latest report received on the application of Convention No. 103 that the social security legislation, particularly Act II of 1975, underwent substantial amendment in 1997. It would therefore be grateful if the Government would include with its next report, due in 2000, the texts of any new laws adopted on sickness insurance and health care and of any implementing regulations. The Committee considers that its examination of the legislation would be greatly facilitated if the Government could indicate the relevant provisions of laws and regulations which apply to each Article of the Convention.

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The Committee notes from the latest report received on the application of Convention No. 103 that the social security legislation, particularly Act II of 1975, underwent substantial amendment in 1997. It would therefore be grateful if the Government would include with its next report, due in 2000, the texts of any new laws adopted on sickness insurance and health care and of any implementing regulations. The Committee considers that its examination of the legislation would be greatly facilitated if the Government could indicate the relevant provisions of laws and regulations which apply to each Article of the Convention.