An announcement of a major hike in the cost of top-up health insurance has caused an outcry in Slovenia and revived calls for ending this type of insurance, which is voluntary but required for virtually every type of health service bar emergency care and which is collected by private insurers.

Generali, one of the three insurance companies that provide top-up health insurance, has announced the premium, which is the same for everyone regardless of their income, status or age, will go up by almost a third from €34.50 to €44.89 starting from May.

Slovenia's health insurance system entails mandatory insurance, which is collected by the public fund ZZZS from contributions from gross salaries and from employers and where the those in higher income brackets pay more, and top-up insurance which provides full cover for some goods and services.

Insurers point to higher expenses

Generali listed several reasons for the hike, including rising prices of healthcare services and an increase in in the volume of health services due to measures aimed at cutting wait times for services, as well as an increase in the range of services covered by top-up insurance.

The insurer said that last year, 95% of its 315,000 clients used medical services covered by top-up health insurance, and that in the first two months of 2023 alone, the costs of surcharges increased by 27% compared to the same period last year. The costs of hospital services went up by over 50%.

Since the monthly top-up insurance premium is roughly the same with all three providers, the other two providers, Vzajemna and Triglav, are likely to follow suit and have suggested they might. They said a continued rising trend in terms of total expenses in the healthcare system would affect the premium.

Vzajemna, the largest provider of top-up health insurance, said it would closely monitor "all additional burdens transferred to top-up health insurance" and that, if the growth continued, this would affect the premium.

Triglav pointed to a strong growth in total costs within the healthcare system, saying that a change in the price of the top-up health insurance premium would be inevitable if the trend continued.

The last time premiums rose was in 2019, and since then outlays for services covered by top-up insurance rose by 31% and expenses for medicines by 36%. The trend continues this year, the Slovenian Insurance Association told the STA on 6 April

During that time, the expenditure of the public health fund increased by almost one billion euros, and the surcharges paid by providers of top-up health insurance increased by more than €700 million, or 31%, the association said.

Calls to scrap top-up insurance

The price hike announcement caused a public furore and the ruling coalition parties noted the commitment set down in their agreement that they will reform healthcare financing where they plan to abolish the "unfair and ineffective top-up health insurance".

Pointing to insurers' profits, they called the price rise unfounded and unfair on clients. Considering the rising cost of living, they believe the hike will make it even more difficult for people to access healthcare services.

The country's biggest trade union association, ZSSS, called the price hike "absurd and unacceptable". It believes it only provides an additional argument in favour of scrapping the top-up insurance.

The union urged the government to take action to prevent "private insurance companies from making money at the expense of workers, pensioners and young people". It proposed raising tax on the insurers offering top-up insurance, or for all profits to be channelled into basic health insurance.

President Nataša Pirc Musar spoke up as well, encouraging the government to "consider drafting a bill to abolish top-up health insurance as soon as possible.

Meeting with the insurers' representatives on 7 April, Health Minister Danijel Bešič Loredan announced a solution by 1 May to prevent a rise in the premium. He said efforts to abolish top-up insurance altogether would also continue.

Decades-long debate to reform insurance

Top-up health insurance was introduced in 1993 to meet the need for more money in healthcare. Initially the Health Insurance Institute (ZZZS) collected both basic mandatory insurance and top-up insurance. When Vzajemna, a mutual health insurer, was founded in 1999, it took over top-up insurance.

Later on, two more insurers started providing this type of insurance, Triglav, and Adriatic Slovenica. The latter has since been taken over by Generali.

Ideas that top-up health insurance should be abolished or folded into mandatory insurance have been discussed for more than two decades and all centre-left governments to date have been planning to tackle the matter. All have but failed and several health ministers quit over the issue.

One of the problems the supporters of the abolishment have been grappling with is how to secure about €600 million that is now collected from top-up insurance.

The supporters of the abolishment argue that top-up insurance is not based on solidarity and that insurance companies generate unjustified profits, so they want to remove them from the health system financing.

Right-leaning political parties, some medical organisations and the insurance companies themselves would like health insurance to be reformed in such a way that commercial insurance companies get a more active role and can compete with the public health fund in providing comprehensive insurance.

Top-up insurance is "the result of a social agreement to the effect that services which are not entirely paid with public sources introduce solidarity between the sick and the healthy... Such solidarity is not unjust," the Insurance Association said in defending the latest hike.

"We realise this is a price increase that can significantly affect household budgets, but if an individual does not have top-up insurance their direct co-payments would be significantly higher," it said.

Some of the factors behind higher costs include population ageing, which drives demand for services, advancements in treatment, higher overall costs of health services, and broader scope of medical services available.