The National Health Insurance Fund under the Ministry of Health (NHIF) is a state authority of the Republic of Lithuania providing the compulsory health insurance. The NHIF resolves the issues assigned to its competence, participates in the implementation of policy of the Government and the Ministry of Health in the field of health insurance, organises the implementation of laws and other legal acts as well as performs other functions provided for in the laws of the Republic of Lithuania, resolutions of the Government, and orders of the Health Minister. The NHIF is supported from the funds of the budget of the Compulsory Health Insurance Fund and accounts for its activities to the Ministry of Health and for its financial activities to the Ministry of Finance as well. The National Health Insurance Fund coordinates the activities of the five – Vilnius, Kaunas, Panevėžys, Šiauliai, and Klaipėda – territorial health insurance funds.

Health insurance funds which date back to the beginning of the XX century in Lithuania were conceived and established as an organisation representing employed people insured against illness. When Lithuania was incorporated into the USSR in 1940, the health insurance funds were liquidated.

The health care system that was financed from the state budget existed in Lithuania during the long years of the Soviet occupation. However, the situation started to change after the restoration of Independence in 1990. On 31 October 1991, the Supreme Council (Reconstituent Seimas) of the Republic of Lithuania adopted the National Health Care Concept of Lithuania, where the health care policy was formulated and priorities in the field were set, including the development of primary health care, introduction of the family doctor’s institution and establishment of the structure of health care institutions according to the primary, secondary and tertiary service provision level. The aforementioned concept constituted the basis for the formation of the Lithuanian health policy. When the drafting of the integrated Law on Health Insurance was delayed in 1991, the decision was made to link the changes in the financing of the first health reform stage with institutions funded from the state budget through the Ministry of Health.

With a view to accelerate the development of contractual relations between health care service providers and financing institutions and to restructure the financing of health care institutions under national jurisdiction, the Government passed Resolution No. 562 “Regarding Financing of Health Care in 1992” on 17 November 1991. On the basis of this Resolution, the National Health Insurance Fund was established by Order of the then Minister of Health Juozas Olekas on 10 January 1992 and Algis Sasnauskas (who managed the NHIF until 10 June 1995 and later from 7 July 2003 until the present) was appointed the first Director of the NHIF.

The Seimas of the Republic of Lithuania approved the budget of the Compulsory Health Insurance Fund (CHIF) in 1997 following the entry into force of the Law on Health Insurance. In that year, it comprised 1.3 billion litas and it grew by more than three times by constantly increasing during the 13-year period: the projected CHIF revenue and expenditure for 2011 amount to 4.17 billion litas.

It should be emphasised that the compulsory health insurance is public insurance that constitutes the basis for the financing of our health care system. Contributions to the CHIF are used to form funds which are administered by Health Insurance Funds.

The Law on Health Insurance and other legal acts of our country establish a compulsory health insurance model based on the principles of universality (obligation) and solidarity. It provides the possibility to insured persons to receive individual health care services financed from the CHIF budget, namely, primary outpatient, specialised outpatient and inpatient health care, first aid, nursing care, maintenance treatment, expensive test and procedure, medical rehabilitation, sanatorium treatment and other services. Funds from the CHIF are also used to compensate the insured for expenditures related to the acquisition of reimbursable medicines, medical aids and orthopaedic equipment. Moreover, the CHIF budget finances health programmes that are important for the residents: student health care in schools, children’s teeth (molar) sealing services, prevention of oncological diseases (uterus, breast, prostate, large intestine cancer, etc). These preventive programmes help diagnosing diseases at an early stage and increase the probability of recovery.

Furthermore, in case a Lithuanian citizen covered by the compulsory health insurance visits the EU countries, Norway, Iceland, Lichtenstein, and Switzerland and he or she needs emergency medical aid, such services provided to this person in these countries are fully or partly covered from the CHIF budget.

The compulsory health insurance provides security to a person – the possibility of getting health care services (irrespective of the amount of contributions paid by the person) at the time when they are most needed. The residents who do not have a compulsory health insurance coverage (are not insured) are required to pay for medical services by themselves according to the tariffs established by the respective treatment institution (except for emergency medical aid).

In one word, the decision on how a person should be treated and what medicines or procedures should be prescribed to him or her is made by treating physicians, whereas the settlement with treatment institutions is a matter falling with the competence of health insurance funds. Territorial health insurance funds sign contracts – documents providing for the obligations of the parties with individual health care institutions and pharmacies. One of the obligations of health insurance funds is to pay, under the established procedure, to health care institutions for the health care services rendered to the residents and to pharmacies for reimbursable medicines issued to patients. Funds from the CHIF budget are used to pay only for the services rendered by health care institutions and reimbursable medicines issued by pharmacies provided that they have concluded a contract with the health insurance fund.

Seeking to ensure that patients are treated properly and attentively, that health care services are not abused and that funds from the CHIF budget are used purposefully, the control and expertise units have been established in each territorial health insurance fund. Specialists of the health insurance funds investigate the submitted complaints, notify the respective health care institution, its founder and the National Health Insurance Fund of any detected violations and demand that the violator assumes responsibility and rectifies the violations.

The purpose of the NHIF is reflected in the mission statement of this institution: “The NHIF offers protection to everybody, either healthy or sick, because it guarantees health benefits to the insured by remunerating its costs and using the funds in a transparent and efficient manner”.

Thus, the most important task of a health insurance fund is to protect the interests of people, the insured, so that they are ensured medical aid and that individuals paying taxes and those supported by the state are provided such services and prescribed such medicines that our state is currently capable of financing.

Currently, health insurance funds have access to one of the largest databases in the health care system and have objective information about its financial flows, the quantity of and changes in the rendered services. This information system is used to provide electronic public services to natural and legal persons. The information system data are used in the planning and administration of the CHIF budget, allocation of funds from this budget according to the demographic indicators, drafting of long-term and short-term forecasts of the demand for funds for specific services, etc. Data are also helpful to experts of health insurance funds carrying out the control of health care institutions because the accounting for the services rendered by individual health care institutions and reimbursed medicines and medical aids issued by pharmacies has been computerised and the inclusion of persons covered by the compulsory health insurance is constantly updated in the National Health Insurance Fund and territorial health insurance funds. Personal data are submitted to the National Health Insurance Fund by the State Social Insurance Fund Board under the Ministry of Social Security and Labour, the State Tax Inspectorate under the Ministry of Finance, the Population Register, the Labour Exchange, higher education schools, territorial health insurance funds and other institutions using data certifying the compulsory health insurance coverage of individuals.