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“Hungary has a long-standing tradition of health services dating back to the infirmaries established and run by monasteries beginning in the eleventh century. The first municipality to build a hospital was Selmec, in the northern part of the Kingdom of Hungary, in 1224. Its primary purpose was to treat injured miners. In the late Middle Ages, groups of miners joined together in this important mining town to create their own mutual assistance funds (bányatársláda), which aimed to cover the costs of sickness and injuries. The first known mutual assistance fund dates back to 1496 (Sárdi, 2003).

“This era of private medicine, mutual assistance funds and church-dominated charities was followed by a period during which the state assumed an increasingly dominant role in the health sector, especially in the provision of health services to the poor, public health and health insurance. In the fifteenth century, town physicians were employed to make services available to the poor, and in 1752 every county in the Kingdom of Hungary was required to offer such services. Hospitals were separated from almshouses in 1856 and offered free health care to the eligible poor in special surgeries. Act XIV of 1876 was the first piece of legislation related to public health to be passed in Hungary. Only the second of its kind in Europe, it stipulated that village and district doctors, as well as chief medical officers, must provide health services free of charge to residents with very low incomes.

“With regard to evolution of health insurance, Act XVI of 1840 legitimized voluntary mutual assistance funds for industrial workers (Sárdi, 2003). Some years later, in 1854, the Habsburg Emperor obliged all companies engaged in mining to set up mutual assistance funds. In 1870 the General Fund of Sick and Disabled Workers was established to manage the contributions of employers and the provision of services to employees (Tarsoly, 2000). Membership in the fund was voluntary, and its financial commitments were guaranteed by the state. These efforts produced mixed results, with 40.6% of industrial workers covered in this manner by 1885 (NHIFA, 2011).

“A landmark in the development of mandatory social health insurance (SHI) was Act XIV of 1891, which made such insurance compulsory for industrial workers and provided for guaranteed benefits-in-kind and cash benefits. This Act was the third of its kind in Europe, following similar legislation in Germany in 1883 and in Austria in 1887. It was refined in 1907 through legislation that set the main principles for governing SHI funds (Sárdi, 2003). At the turn of the century, a national scheme for agricultural workers was set up to cover work-related injuries (Tarsoly, 2000), and the National Fund of Patient Care was established in 1898 to reimburse health care costs for the poor.”

Source: Gaál P, Szigeti S, Csere M, Gaskins M, Panteli D. Hungary: Health system review. Health Systems in Transition, 2011; 13(5):1–266.

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“The first post-communist government was formed in March 1990 by a coalition of the Hungarian Democratic Forum, the Independent Smallholders’ Party and the Christian Democratic People’s Party. This coalition successfully established the contract model in the health care system between 1990 and 1994. Act LXV of 1990 on Local Government created the provider side of the new contract model (1990/3), devolving the ownership of primary care surgeries, polyclinics and hospitals from central government to local governments along with the responsibility, known as the “territorial supply obligation”, to ensure
the supply of health care services to the local population. As part of the reform of public health and the modernization of health system administration, the NPHMOS was established as a state agency in 1991 (1991/1). After a debate on whether to move towards a single-insurance model or a system with multiple, competing health insurers, a single-insurance model was chosen, but the option of introducing competition among multiple insurance plans in the future was left open (1991/3).

“From 1990 until 1992, health insurance and pension insurance in Hungary were financed through the Social Insurance Fund. In 1992, however, the government divided the Social Insurance Fund into two entities: the HIF and the Pension Insurance Fund (PIF) (1992/2). The administration of these funds was reformed in mid-1993, when the National Social Insurance Administration was divided into the NHIFA and the National Pension Insurance Fund Administration (NPIFA) (1993/7).”

Source: Gaál P, Szigeti S, Csere M, Gaskins M, Panteli D. Hungary: Health system review. Health Systems in Transition, 2011; 13(5):1–266.

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World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other OECD member nations.

Page last updated February 21, 2025 by Doug McVay, Editor.