Armenia's mandatory health insurance sparks criticism over upfront payments and refund process

As Armenia rolls out its mandatory health insurance system, citizens continue to raise concerns about payment rules that require some people to pay insurance premiums upfront and seek refunds later, a process critics say places an added financial and administrative burden on vulnerable groups.

According to explanations provided by the Ministry of Health to Panorama.am, individual entrepreneurs (IEs) who are registered under a pensioner’s name or who themselves have a disability must make a one-time annual insurance payment of 129,600 drams ($330) if their business turnover exceeded 2.4 million drams ($6,100) in the previous year. The payment is required even if the individual otherwise qualifies for state-covered insurance, with reimbursement available only after submitting a formal application at the end of the year.

The same rule applies to IEs who also work as salaried employees elsewhere and earn more than 200,000 drams per month. In those cases, individuals must still pay the insurance contribution for their business activity and later apply to the Health Insurance Fund for a refund.

“Total payments made by individuals with multiple calculation bases, either by themselves or their employers, cannot exceed the monthly insurance premium set by law,” the Health Ministry said in a written response to Panorama.am. “Any amount paid in excess of the established monthly premium is refunded within three working days after the individual’s obligations are fulfilled and the relevant registration is completed.”

Refunds are issued only upon application by the insured person and transferred to the bank account specified in the request, the ministry said. A single submitted application remains valid for future refunds of overpaid premiums.

As a result, citizens are required in all such cases to make additional payments first and recover the funds later. While the law formally guarantees reimbursement of double payments, the current system effectively operates on a “pay first, refund later” basis.

Experts and affected citizens say this approach disproportionately affects socially vulnerable groups, including small-scale entrepreneurs and people with limited incomes, who may lack the financial means to make large upfront payments. The process also relies heavily on individuals being informed and proactive, as refunds are not automatic and require formal applications.

This requirement can pose particular challenges for elderly citizens or those with limited digital skills, who may struggle with administrative procedures. Specialists say simplifying the process and reducing the need for upfront payments would better align the system with its stated social goals.

The ministry also clarified that recipients of military pensions are not included in the mandatory health insurance system, even though some of their medical services are already covered by the state under separate arrangements.

In the case of children with disabilities, the law provides that one parent or guardian may be included in the mandatory health insurance system. To do so, the parent or guardian must submit an application to the Health Insurance Fund.

If one parent of a child with a disability is employed and earns more than 200,000 drams per month, that parent is considered insured. The nonworking parent may apply to be included in a group fully covered by the state. Applications can be submitted either in person at the fund or electronically via [email protected].

The Health Ministry said the official application form has not yet been finalized but is expected to be approved in the near future.