Deadline for Slovakia’s single health insurer plan delayed to 2015 at the earliest

By bne IntelliNews August 6, 2013

The deadline for the Slovak government’s controversial plan to create a single, state-run, health insurer through nationalising the country’s two private health insurers has been postponed to 2015 at the earliest from the initially aimed July 2014, CTK news agency reported.

According to Prime Minister Robert Fico, the preparations for the fulfillment of the plan have been delayed. This has probably happened as the cabinet has met a fierce resistance by the owners of the two private health insurers to sell their operations to the state. The government had indicated that it would prefer to reach an agreement with the owners of the private health insurers to buy out their stakes, but if an agreement could not be reached, the insurers will be expropriated. However, the law that would allow for the expropriation of private health insurers, which was initially envisaged to enter into force in May 2013, has not been debated in parliament yet. A forced buyout would be unprecedented in Slovakia. According to the Slovak constitution, expropriation is only allowed if deemed in the public interest and if adequate compensation is paid.

According to lawyers, the deadline for the completion of the nationalization may be moved much further far in time, as there are expected court disputes between the state and the owners of the private health insurers, while the expropriation cannot become valid before the court decides.

Slovakia’s two private insurers, Union and Dovera, have a total of 1.9 million customers among a population of 5.4 million. They are controlled by Dutch insurance group Achmea and Czech-Slovak financial and investment group Penta, respectively. Achmea has already initiated an arbitration procedure against Slovakia regarding the government’s expropriation plan. The new arbitration procedure came shortly after an International Arbitration Tribunal in December 2012 ruled in Achmea's favour and decided that Slovakia must pay EUR 22mn compensation for the damages Achmea incurred when its ownership rights of Union were violated between 2007 and 2011.

Slovakia opened its health insurance to the private sector in 1993, but the current government considers that plurality and profit-making by health insurers did not improve the quality of the Slovak healthcare system, but contributed to its deterioration.

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