A state budget contribution to the Compulsory Health Insurance Fund (CHIF) for people insured by the state is defined under the Health Insurance Law. Despite a substantial share of population that it covers, historically the state contribution has been low, with multiple attempts over the years to raise it.
The change to Health Insurance Law that comes into force from January 2027 ties health insurance contributions to average annual contribution of a working person two years prior. In 2027, the share would be set at 50% of average annual contribution (6.98% of average annual wage), increasing each year by five percentage points until it reaches 75%. In 2026 (and since 2021) the state contribution was tied to minimum wage (set at 6.98% of annual minimum wage two years prior). In nominal terms, this means that between 2021 and 2026, state contribution per person per year increased from EUR 465 to EUR 774, and in 2027 it is set to increase to EUR 1003, then rising by at least five percentage points annually over the next five years, even if the average wage of workers in Lithuanian economy stagnates.
This change is the latest in long-term strive to increase public financing for health:
- In 1996, the Health Insurance Law came into force in 1996, setting the annual state contribution per person to be defined by the Parliament every year, as part of confirming the next year’s budget.
- From 2003, the annual state contribution was set to be not lower than 35% of average monthly insurable income defined by the State Social Insurance Pensions Law, but state contributions never reached that amount.
- From 2007, the annual state contribution has been tied to average monthly wage two years prior, introducing a countercyclical element and setting the share at 26%, increasing to 32% by 2009, 35% by 2012 and 37% by 2014.
- From 2016, the share was set to further increase from 37% to rise by two percentage points annually until the amount reaches 9% of the annual minimum wage two years prior.
- In light of the tax reform implemented in 2019, in 2018 amendment was passed for the annual state contributions reaching 41% of the average monthly wage two years prior to increase to 47% by 2020, and from 2021 to be set at 6.98% of the annual minimum wage two years prior.
- Amendments in December 2025 set the annual state contribution for people covered by the state for 2027 at 50% of the annual average contribution of a working person two years prior, increasing annually by five percentage points to reach 75% of the annual average contribution of a working person two years prior.
Thus, over 30 years, the reforms addressing health insurance contributions for vulnerable groups covered by the state have gradually increased and stabilized this source of public expenditure on health, shifting from politically determined contributions with short-term horizon to countercyclical mid-term formulas tied to wages and eventually to average worker contributions. The steps taken largely tended to increase the level of funding, make financing more predictable and automatic, strengthened solidarity and reduced volatility to economic shocks and population ageing. The latest change represents the most significant boost, ensuring structurally higher public financing for population groups ensured by the state by tying contributions financed from general taxation to a higher and rising base.