Slovakia will return to having a single, state-run health insurance system and nationalize two private insurers, against their will if necessary, Prime Minister Robert Fico said on Wednesday.
The centre-left government plans to reverse a decision made when the former communist country gained independence in 1993, to open health insurance to the private sector – a move that some Slovaks see as a step backward.
“The government that I head rejects the notion of private health insurers making profits from taking public money and then using those profits to realize their ideas of a luxurious lifestyle,” Mr. Fico told reporters, saying the newly unified insurance system would be in place by 2014.
“We think it will be more efficient [to have a single health insurer] because no money will flow into the private coffers of the owners of private insurers.”
A forced buyout would be unprecedented in Slovakia and Mr. Fico said the government would prefer to negotiate acceptable terms with shareholders by the end of 2013.
Two private health insurers operate in Slovakia alongside the state system: Dovera, controlled by Slovak-Czech private equity group Penta Investments, and Union, a unit of Dutch insurer Achmea. They cover about 1.8 million people among a population of 5.4 million.
According to the Slovak constitution, expropriation is only allowed if deemed in the public interest and if adequate compensation is paid.
Mr. Fico gave no indication of how much the state would pay for the two businesses and said an international consultancy would be brought in if no agreement is reached and the government decided to expropriate the assets.
Some Slovaks believe they get better service from the private companies and, according to the Slovak Health Policy Institute – a private think-tank – more than 10,000 have already signed a petition against returning to a single health insurer.
Mr. Fico said he was prepared to sell unspecified state assets to fund the acquisition rather than tap the 2013 budget. The opposition has suggested the state would have to pay hundreds of millions of euros.
The euro zone country aims to cut its budget deficit below the European Union’s limit of 3 per cent of GDP next year, from a planned 4.6 per cent this year, and the government is raising taxes on companies, banks and high-earners in order to do so.
The Slovak Association of Health Insurers said in July that private operators were not interested in pulling out and that returning to a single health insurer was not the best option.