Civilnet
By Elen Muradyan
Armenia’s universal health insurance system, launched earlier this month, risks falling short of its stated goals unless deep financing and governance problems are addressed, according to a policy brief published this week by the Armenian Center for Socio-Economic Studies (ACSES), а Yerevan-based think tank.
The reform, introduced as a phased transition between 2026 and 2028, aims to reduce Armenia’s heavy reliance on out-of-pocket health spending and expand access to basic medical services through mandatory insurance contributions. The report, however, warns that the current model combines high public expectations with weak institutional and fiscal foundations.
According to the report, Armenia entered the reform with one of the lowest levels of public health financing in the region. In 2023, the state covered only about 15% of current healthcare expenditures, the rest coming from private sources, mainly direct household payments.
According to Armenia’s National Institute of Health, out-of-pocket healthcare spending accounted for about 7.5% of GDP in 2023, more than four times the global average of roughly 1.7%. As a result, Armenian households spend over 16% of their income on healthcare, one of the highest ratios in the region. This has led to skepping care, with a significant share of the population, particularly among low-income and extremely poor households, delaying or avoiding even primary medical services for economic reasons.
The think tank argues that this makes universal health insurance economically justified, but cautions that the system’s design limits its redistributive effect. Armenia has adopted an insurance model under which salaried workers contribute while the state pays premiums for children, pensioners and other designated groups.
However, unlike similar systems in other countries, the Armenian model lacks strong internal solidarity, as higher-income contributors do not directly subsidize lower-income groups. Instead, the fiscal burden of non-paying beneficiaries is shifted largely onto the state budget, increasing sustainability risks as costs rise during rollout.
The report also highlights provisions that allow medical providers to charge patients up to twice the state-set reimbursement rate, with the difference paid out of pocket. ACSES warns this could preserve unequal access to care and undermine the reform’s core objective of financial protection.
Beyond financing, analysts point to unresolved governance and capacity issues. Effective universal insurance requires a fully operational management system, clear service standards, and realistic assessments of workforce and infrastructure constraints. These elements remain incomplete at launch.
The report concludes that Armenia’s universal health insurance should be seen as an unfinished reform with success dependent on stronger public financing, tighter cost controls and credible governance, rather than on the formal start date alone.
Also read: Armenia’s universal health insurance reform begins with key elements missing
Stories
