Mon Jul 21st, 2008 at 08:00:20 AM EST
Discontent with healthcare privatisation was the prime campaign theme of the 2006 elections in Slovakia, and promises to undo it were a main reason for a new bizarre coalition of three populist parties taking government.
After taking office, PM Robert Fico didn't dare to start renationalisation outright, and overall, his government implemented only minor changes to his predecessors' radical neoliberal reforms. However, it seems that with his power now consolidated, Fico felt he has the power to risk some conflict with the private insurers - and conflict there is, one of them brought the government into court, demanding half a billion Euros in damages.
Consolidating power in a "catastrophe coalition"
Back in 2006 (when I wrote my intro on politics in Slovakia: Ahead of the Slovakian Elections...), Smer, the left-populist party around rich entrepreneur turned politician Robert Fico, won the elections with 29.14% of votes, so they had to coalition - and they did so with HZDS, the party of former criminal PM Vladimír Mečiar, and SNS, a far-right party around the Slovakian Le Pen, Ján Slota (Quotes: "The best policy for Gypsies is a long whip in a small yard", "We will sit in our tanks and destroy Budapest"; and see my earlier comment on new revelations on his criminal past). There were only three shared values of the coalition partners: social populism of differing levels, nationalism (also see the story of a politicised miscarriage of justice in On a dark street), and a dislike for criticism in the media (on the last see the diary Slovakia: Lisbon Treaty vote and domestic turmoil and some recent furore over selective paid advertisements).
However, instead of going under in scandals, Fico managed to benefit from them all, and also benefit from the economic boom that started under his predecessors, without implementing drastic changes.
He let the HZDS agriculture minister fall over a corruption scandal, and when Mečiar threatened to leave the coalition, Fico called his bluff and suggested that court cases on crimes during Mečiar's tenure would be rolled out again - HZDS is now eating out of his hand. While upon forming government, the European Socialists suspended Smer for coalitioning with SNS, the party was welcomed back earlier this year (PES can be as hypocritical as the EPP). He could exploit the internal divisions of the right-wing opposition parties, for example breaking their obstruction of the vote on the Lisbon Treaty (see again Slovakia: Lisbon Treaty vote and domestic turmoil).
Meanwhile, with GDP numbers still going strong and the budget under control, Slovakia is to introduce the Euro next year - but to forestall inflation fears, they plan to form a Price Council. The government also made some minor improvements in social benefits, to be boosted in 2009 (family benefits, pensions).
Thus, though analysts wonder, I'm not surprised that in Slovakia Fico remains the most popular politician by far (see July politicians poll by ÚVVM [pdf!]), and that Smer would win eventual new elections all by itself (polling a stratospheric 48.5%, see July party poll by ÚVVM [pdf!]).
So: time to take on the private healthcare insurers!
The healthcare battle
Private insurers exist in Slovakia since 1995, but the original system was a messy mixed one. After the previous government's 2002 "reform", healthcare provision in Slovakia was made not for free, and responsibilities were divided up between two state and the already existing (currently four) private insurers, and the privatisation of hospitals was started.
The Fico government realised early on that renationalisation would cost a lot in compensations, on top of which the more recalcitrant private insurers could sue. So instead, they only eliminated hospital and doctor visit fees, and reduced tax on medications, and stopped the ongoing hospital privatisation.
But, on 25 October 2007, the government majority voted for a major change in law, in effect from the start of this year. Among its elements:
- Private insurers leaving the Slovakian market have to give up their clients for free (in effect: renationalisation through the back door made cheap);
- Only 3.5% instead of 4% of income can be booked as operating costs;
- Paying dividends was forbidden: profit has to be re-invested.
The last point is the real bone of contention. Investment group HICEE, majority owner of the largest and 49% owner of another private insurer, and currently headed by Dutchman Pieter de Kok, sued for €500 million on 17 January. They left six months for an amicable settlement, which was over last Thursday.
But PM Robert Fico reacted with strong words already in January ("gangsterism", "a brazen act of disrespect"), and again in June: "They want to mess with the State? Please, let's go, we are ready!" and "We will never allow the insurers to make profit on money people's compulsory payments into their budgets."
So now HICEE will initiate international arbitration. Meanwhile, the other private insurers started their own legal suits.