Slovak PM says to buy or expropriate private health firms

Reuters News
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Posted: Jul 25, 2012 10:49 AM
Slovak PM says to buy or expropriate private health firms

BRATISLAVA (Reuters) - Slovakia unveiled plans on Wednesday to buy out or expropriate its two private health insurers, judging that reinstating a unified state-run insurer would save the government cash that now goes into insurers' and other private sector pockets.

A forced buyout would be an unprecedented move in the euro zone country's history and Prime Minister Robert Fico said the move would be very carefully carried out to avoid trouble in court as he expected investors to fight his plan.

The health-care ministry, tasked with reporting by the end of September on how to proceed with the government's plan, argue a single insurer would lower costs and scrap profits, now kept by private insurers, and channel them back to the system.

The ex-communist country has two private health insurers: Dovera, controlled by Slovak-Czech private equity group Penta Investments and Union, a unit of Dutch Achmea B.V., servicing some 1.8 million clients in the 5.4 million country.

Fico, who advocates a strong hand of the state in the economy and tough regulation of utility prices, wants to conclude the process by the end-2013, and he said he was ready to sell unspecified state assets to raise capital for the acquisition.

"It would be ideal if we could reach an agreement on the buy-back," Fico told reporters after a regular weekly meeting.

"In case we will not reach an agreement, we will use the expropriation measure. This is a standard procedure written down in the constitution and known also elsewhere in Europe," he said.

"This (expropriation) is in the public interest and is in return for compensation (for the investor.)"

Fico, who had banned private insurers from making profit during his 2006-2010 rule but was later overruled by the Slovak Constitutional Court, declined to speculate the on value of the transactions.

Katarina Kafkova, head of the Slovak Association of Health Insurers, told TV-news channel TA3 earlier on Wednesday that private investors were not interested in ending their operation in Slovakia.

"We don't consider re-installation of a single health insurer is the best possible option," Kafkova said.

In Slovakia all citizens have universal access to health-care services covered by insurance houses, excluding dental or cosmetics surgery, and the right for cost-free treatment.

Slovaks pay mandatory 14 percent health-insurance tax from their incomes and can pick one the country's three insurers as provider.

(Reporting by Martin Santa)