Why don't entrepreneurs like the health premium?

Piotr Wojcik: What do entrepreneurs dislike most?

Szymon Ostrowski: Among the top three concerns of small entrepreneurs by far is the need to pay Social Security premiums. I'm referring to all types of Social Security contributions - both pension, sickness and health contributions (we consider them as one, although of course they are different contributions, going for different purposes).

Piotr Wojcik: Health premiums have been talked about a lot lately in the context of the ruling coalition's proposed changes. Recall. Before the Polish Deal, the health premium was tax deductible, so entrepreneurs did not feel so much that they were paying it. When the Polish Deal came in, this possibility was eliminated. The health contribution did not get good press, and now there is a proposal to lump this contribution and lower it. I'm speaking in a very simplistic way, but the general idea is just that. Is this a good thing or a bad thing?

Szymon Ostrowski: Social Security premiums have always been a sore point, for the reason that you had to pay them regardless of whether you made a profit or not. If an entrepreneur had a loss in a given month, he still had to pay ZUS premiums. In the case where we had to deal with changes related to ZUS premiums, calculated already at this point on our income (fixed rate on income) then here, in a way, one could theoretically say that this is a better solution, because if we earn less then the premium will be lower. However, in a situation where we had a high income we still gave up 9 percent as a health premium. Therefore, any attempt to reduce the health premium for entrepreneurs, from the perspective of people running a business - will be good. Because most entrepreneurs believe that any kind of public burden, no matter what it is, should ideally be as low as possible. Of course, it's not that entrepreneurs want to avoid paying such premiums, but they want rules that are clear, how to account for it, how much to pay, etc., so that they are able to adapt the business to such costs. In the case of the health contribution, which is still in effect for the time being, there was a lot of confusion about how to account for it, how much to actually pay. There, there was still the issue of having to pay the health premium when, for example, selling fixed assets, even if it was a car, and so on. The changes now planned will perhaps be more favorable to entrepreneurs.

Piotr Wojcik: These planned changes represent, in practice, a very large group of entrepreneurs a relief of 100 PLN per month. This is already, it seems to me, quite a lot. Especially if we take into account that, in fact, the health contribution is another tax, only slightly differently named.

Szymon Ostrowski: Well, yes. I would not be afraid to define that it is indeed a tax. I don't hide the fact that as I talk to many entrepreneurs, especially micro ones, they think that in general Social Security contributions are a tax and should be treated as such. In the sense that we pay, but we don't always know what we will get for them. This is the way it is approached. Yes, every 100 zloty of monthly profit is some kind of benefit.

Piotr Wojcik: But this is where the outcry from full-time employees comes in. Because people who are on a full-time job, let's assume on the lowest national salary, say that if from their salary so much goes to the health premium, and a sole proprietor will pay much less, where is the justice here?

Szymon Ostrowski: There is no justice in life, unfortunately. But on the other hand, I would ask the question, how many employees are actually closely following their pay slips, on which all these contributions are placed? Because what really matters to employees is largely what they actually get in their accounts. This is more of a hassle for entrepreneurs, who have to account for all this money, pay it on behalf of employees to the treasury, to various budget compartments. There have even been such funny proposals in the past to pay employees gross salaries and let them settle Social Security for themselves. Then they will know how much of this money goes to the budget. In my opinion, this is the eternal conflict between employer and entrepreneur, so the employee will always think that he is disadvantaged, regardless of whether he will directly pay this money out of his own pocket, or whether it will be deducted from his gross salary and transferred by the entrepreneur to the state coffers.

Piotr Wojcik: Do entrepreneurs dislike paying their Social Security contributions more or do they dislike paying those that generate an even higher cost of hiring an employee?

Szymon Ostrowski: Employee contributions affect labor costs in real terms. Labor costs are already getting higher. This shows that more and more companies, even larger ones, are starting to leave Poland because they are starting to be bothered by rising labor costs. They are also related to the rising minimum wage, on which many other contributions are counted. But to a large extent, the whole enormity of these costs associated with hiring an employee is why these very companies are already starting to leave Poland slowly. And what is the smallest entrepreneur, who employs 10-12 workers, supposed to say in this connection? He, too, has to earn all this, just like a big company.

Piotr Wojcik: It is not without reason that Social Security contributions are divided into two main categories, namely social contributions and health contributions. The health contribution is this "health tax," because it funds the health care system. Somewhere there was a calculation that this will cover about 5 billion zlotys of revenue for the health sector. On the other hand, there are claims that we took this 3 billion from TV and put it into health, into oncology, among other things, pediatric oncology, but still 2 billion is still in question. If we had a system that didn't quite meet public expectations for a higher amount, will we have it for less?

Szymon Ostrowski: I'm afraid to say that no matter how much of this money we would pour into the public health service, it may still not function as we all would like it to. Health care is an unusual business because of the very large emotional aspect. Because it is, however, a matter of our health. We don't want to price it. Rarely does anyone realize that every medical procedure can be priced. Even in those most complicated operations, procedures, everything always has a specific cost, for which you can invoice. It can all be calculated. Just like insurers, for example, who insure our cars. They too are able to calculate everything. The same is also true of health. Even life can be valued in a certain way. Social Security has its rates, it has valued how much a person's life costs for at least death-related benefits. So no matter how much money we put into the system, there will always be not enough. Here it is worth considering what can be improved to make it work more efficiently. Of course, someone may say, well, after all, you can privatize health care. There are many people who are afraid of the word "commercialization," because it seems immediately that you will have to pay for everything. However, we have examples of hospitals or public health organizations that are very well organized, and often much better than companies that rely solely on private medical subscriptions and serve these customers, primarily in large cities.