Mandatory contribution to replace top-up health insurance
Following a furore after a private insurer announced a hike in the top-up health insurance premium, the government decided to scrap this voluntary but virtually essential type of insurance and replace it with a new mandatory contribution, taking private insurers out of the equation.
A bill foreseeing a new contribution in the fixed monthly amount of €35, roughly the same that clients now pay for the monthly premium to private insurers, was tabled by the largest ruling coalition party on 11 April in a surprise move as the coalition had not been planning to abolish top-up insurance before 2025.
Until the legislation comes into force - the target date is 1 September this year - top-up health insurance will be capped at €35.67 by means of a government regulation that will be formally issued on 14 April, under a decision taken by the government on 13 April.
The new contribution would be adjusted once a year relative to the rise in average gross pay. It is to be paid for by employers on behalf of employees and the public pension fund ZPIZ is to pay it for pensioners, according to the draft proposal obtained by the STA.
Mandatory health insurance would thus consist of two parts - the existing obligatory health insurance that is paid proportionally to a person's income, and the new obligatory contribution at a flat rate of €35 a month for everyone.
The contribution would be collected by the ZZZS public health fund and no longer by three private insurers that have been providing top-up insurance so far, under the proposal, which builds on two previous blueprints seeking to abolish supplementary health insurance.
Although voluntary, top-up insurance is required for virtually every type of health service bar emergency care. For two decades, centre-left governments have been trying to scrap it, but failed and several health ministers are said to have quit their jobs over the matter.
Currently, three private insurers, Vzajemna, Generali and Triglav, charge €35.67, €34.50 and €35.55 a month for the top-up health insurance, respectively. Generali announced it would rise the premium to just shy of €45 starting from 1 May and the other two insurers were expected to follow suit.
As a safeguard against financial risks that could arise from abolishing supplementary health insurance, the proposal is for funds to be set aside in the state budget to cover for the shortfall in revenue over expenditure.
Being that top-up health insurance is now voluntary, the new contribution will impose an extra burden on those who do not pay supplementary insurance now. There are an estimated 5% of those.
Prime Minister Robert Golob said that basically nothing would change for the remaining 95%, except that they would not have to pay €120 extra a year that they would if higher premiums were implemented. He said the government wanted to prevent profiteering by insurers.
The bill amending the Health Care and Health Insurance Act is seen as a stop-gap solution as the government plans to reform the entire healthcare financing system by the end of 2024. The prime minister expects the bill to be passed in parliament before the summer recess.
The bill was tabled just before a civil society group which has been staging pensioners' protests was expected to file its version of the bill. Under parliamentary rules of procedure, whichever bill is tabled first has to be processed first.
Proposal met with caution
The stakeholders have met the proposal with caution. The opposition described it as "cheap PR", private insurers said it would not help make the health system sustainable long-term, whereas employers warned against any new levies, and trade unions oppose the idea of a flat contribution.
The Slovenian Insurance Association said it was not opposed to the move per se. However, its president Maja Krumberger criticised the government for what she described as a "populist political decision" that "will be more expensive than it seems at first glance."
"They have criticised insurers for planning to increase premiums but acknowledge that there will be a shortfall of €180 million - we estimate it will be €200 million. This means there are grounds to raise premiums," she said.
Individual insurers refused to comment in detail until they have seen and analysed the legislation but called for prudence and consensus in taking on changes to systems such as health insurance. Similarly, the ZZZS refused to comment given that the wording has not been published yet and the timeline has not been specified.
Employer organisations are concerned that the new contribution may become an additional financial burden on business. As they understand the proposal, employers would only perform the accounting part by making sure the new levy is paid from each wage, while the money would come from the pocket of employees.
It remains open, however, how to treat those who have intentionally decided not to pay top-up insurance, the unemployed, the Chamber of Commerce and Industry (GZS) said. The Chamber of Commerce (TZS) noted that wage accounting system would have to change accordingly.
Both centre-right opposition parties, which have never been in favour of abolishing top-up insurance but have advocated a more market-oriented approach with multiple insurers competing for premiums, openly criticised the move.
Describing it as "cheap PR," the Democrats (SDS) said the government's measures are confused and the priorities unclear. "Many reforms have been announced but none of them go in the right direction," MP Zvone Černač said.
Černač also noted how Prime Minister Robert Golob said at the start of the year that ZZZS was to be the nexus of reform efforts, but now this has been forgotten.
New Slovenia (NSi) described the proposal as "moving money from the left to the right pocket." Deputy Iva Dimic said it was unlikely that the change would make healthcare more accessible or help achieve other health reform goals.
The country's main trade union associations hailed the plan to abolish the top-up health insurance, but they disagree with a fixed-rate contribution, "which means preserving an unfair and regressive form of health insurance contribution that is a much bigger financial burden on low-income earners".
"We expect the proposal to be amended in legislative process to make the contribution dependent on the individual's disposable income and to preserve the solidarity principle in the health system," they said. They also expect a solution for employees at insurance companies potentially affected by the change.