Voluntary health insurance in Slovakia

Health system context

The health financing mix

In 2010, total health expenditure (THE) in Slovakia reached EUR 4.7 million or 7.3% of GDP (Szalay et al., 2011). Statutory health insurance has been the major source of health care financing in Slovakia since it was reintroduced in the early 1990s, and in 2010 accounted for 73% of THE. Contributions are collected by three autonomous (operating nationally) health insurance companies: the General Health Insurance Company (VsZP) (3.5 million insured), Dovera (1.4 million), and Union Health Insurance Company (0.4 million). Economically active population (2.2 million) pays income-related contributions (14% of salary in 2010). Contributions for economically non-active population (3.2 million) are paid by the state and covered from tax revenues (4.78% of the average wage in 2010). Private sources account for 24% of THE and mainly come from OOP payments (99.8%), with VHI playing a marginal role (0.05% of THE and 0.2% private expenditure). The remaining 3% of THE comes from the Ministry of Health funds (including EU funds) used for administration, public health and in a very limited manner for capital expenditures.

Entitlement to publicly financed health care and gaps in coverage

The Slovak health care system provides universal coverage for a broad range of benefits. “In the Slovak health system, the introduction of formal cost-sharing in 2003 has noticeably reduced the depth of coverage. Cost-sharing mainly takes place through a system of small user fees for prescriptions and certain health services (for example, emergency care) as well as co-payments for pharmaceutical and spa treatments” (Szalay at al., 2011).

People can choose among three competing health insurance companies (Szalay et al., 2011). They compete by providing additional product packages for different age groups; discounts on public health insurance contributions; and other discounts (e.g. on eye care, vitamins, vacations, use of sports facilities, direct payments at doctors’ practices).

Some indicators, such as high (and increasing) waiting times for elective procedures and increasing patient complaints, point towards increased pressure on the public health system and potential scope for the development of VHI market in Slovakia (assuring faster access and access to better quality of care).

Overview of the VHI market

Market origins, aims and role

VHI emerged in Slovakia in 2004 during the 2002-2006 reform period when managed competition was introduced into the health system (Szalay et al., 2011). It became part of the Health Insurers Act 581/2004 and was encouraged by the government.

The VHI market is not well developed in Slovakia. This is due to the following reasons:

• The definition of the basic benefit package is very vague and all treatments are officially reimbursed by the health insurance companies under the statutory system. Only a limited number of co-payments is applied for additional services in healthcare facilities.
• Types of benefits of the OOP payments are not attractive for the insurance companies (OOP – payments on drugs, pharmaceuticals, prepaid programs of private providers, informal payments). When patients have to apply prepaid payments, they choose a specific supplier of healthcare services, who they have experiences with, rather than VHI, which would not secure them the free choice of supplier.

VHI mainly plays a supplementary role, covering, among other, an easier access to outpatient care as well as coverage for higher standard room facilities during hospitalizations (the popularity of these rooms is increasing, however, the number is still low). Fees for high standard rooms in Slovakia account for EUR 5 – EUR 50, while these rooms do not even meet the minimum standards for being considered as high standard rooms. Due to this, Slovak patients still do not feel the necessity to ensure special insurance for these kinds of cases.

Types of plans available

VHI plans mainly cover preventive care, higher standard of inpatient amenities and easier access to outpatient treatment. Coverage may include:

• Preventive check-ups;
• Simplified booking of doctors’ appointments through call centres;
• Daily cash benefits during hospitalizations (caused by accident, illness, and during maternity, including delivery);
• Higher standard room in hospitals;
• Eye and dental care;
• Rehabilitation.

Eye, dental care and rehabilitation are included in the statutory benefit package, but with VHI a higher standard, easier access to treatments and shorter waiting times are enabled.

Why do people buy VHI?

Interest in purchasing VHI plans is very small in Slovakia and only a marginal part of the population purchases VHI coverage (in 2011, approximately 51 000 VHI contracts were sold; see Table 1).

Table 1. Number and value of VHI contracts in Slovakia, 2008 – 2011

Source: National Bank of Slovakia (2012)

The existence of high waiting times makes the underdevelopment of VHI particularly interesting, as jumping waiting lists is one of the main driving force for purchasing VHI cover in other countries. The reason for this is that in Slovakia outpatient care may be easily accessed through direct payments in the private sector and inpatient care in the public system can be accessed through informal payments and these irregular payments (e.g. EUR 10 for prioritized consultation) are on average lower than regular VHI contribution payments.

Who buys VHI?

Information on who buys VHI in Slovakia is scarce. According to the estimates from anecdotal evidence, VHI is usually purchased by employers for their employees in the form of group policies. VHI cover is offered as an additional employment benefit to assure comparative advantage on the labour market.

Who sells VHI?

VHI is offered by commercial insurance companies, which are allowed to make profit. They are independent from the three health insurance companies providing public health insurance. The National Bank of Slovakia issues their licenses and monitors their activities. Three insurance companies currently sell VHI plans in Slovakia (all operate on a for-profit basis): Union (owned by Achmea, a multinational insurance company which also operates in the statutory health insurance market), Wüstenrot and Uniqua. Wüstenrot and Uniqua are also part of large multinational companies present in the Slovak general insurance market.

In 2005, an exclusive VHI contract was negotiated between the state-owned VsZP and the commercial VHI insurer Union, enabling those insured in the VsZP to purchase VHI plans from Union at a 10% discount (Health Policy Institute, 2006). A similar partnership agreement was later negotiated between the Union Health Insurance Company and the commercial VHI insurer Union (50% discount on VHI plans purchased from Union for the clients of Union Health Insurance Company).

In 2006, out of 25 commercial insurers (non-life), only Union offered VHI cover. The market share of VHI in the non-life insurance market was only 0.2%. Some insurance companies entered the market later (Generali, Uniqua) and they focused only on specific VHI products, such as daily reimbursements for hospital stay.

Today, the Slovak VHI market remains highly concentrated, with three companies (Union, Wüstenrot and Uniqua) covering 100% of the market.

Insurer relations with providers

Commercial insurers are not vertically integrated with healthcare providers. Individuals with VHI cover can be treated in public as well as in private health care facilities. Providers are paid on a FFS basis and fees are negotiated between providers and insurers. VHI policy holders make payments directly to the providers and get reimbursed afterwards. No cost sharing is required; however, an upper ceiling on benefits may be applicable for specific treatments and insurance products.

Public policy towards VHI

The VHI market is regulated by the National Bank of Slovakia and the Healthcare Surveillance Authority. In fact, activities of all commercial insurers in Slovakia are monitored by the National Bank.

The key piece of legislation in the VHI market is the Health Insurers Act 580/2004, which came into force on January 1^st 2005 and made a distinction between public and voluntary health insurance. According to Health Insurers Act 581/2004, a health insurance company may offer VHI on its own, respecting Act No. 8/2008, which defines general insurance conditions.

Development of the VHI legislation in Slovakia

Two major acts, which relate to VHI (Health Insurance Act 580/2004 and Health Insurers Act 581/2004) were amended a few times after 2004, however, these amendments did not change the nature of VHI.

Debates and challenges

The role of the VHI in Slovakia is marginal and it does not command much interest in the discussions concerning further health care reforms. The debate focuses on the financing challenges, however, the option of increasing the role of VHI in health care financing is not taken into consideration. The main reasons for this are the limited scope for the development of VHI due to the structure of co-payments, the vaguely defined basic benefit package and the deeply-rooted perception among the population that health care should be free of charge.

Before the 2012 parliamentary elections, several political parties presented the need to define a basic benefit package in Slovakia in order to narrow the scope of standard treatments provided and to launch a more complex system of VHI for the higher standard services. However, the newly elected social-democratic government is against private financing of the health care system and supports universal coverage and financing of deficits from public sources.

The future of VHI

No major changes to the VHI market are expected in the near future, when the current government is in power (until 2016). Thus, the VHI market will remain marginal due to the undefined basic benefit package and the poorly conceived OOP payments system.

References:

Health Policy Institute (2006)

Health Policy Institute (2011) 

Szalay, T., Pažitný, P., Szalayová, A., Frisová, S., Morvay, K., Petrovič, M. and van Ginneken, E. (2011). Slovakia: Health system review. Health Systems in Transition, 2011; 13(2):1–200.

National Bank of Slovakia (2012)

This project was realized for the University of London School of Economics within the international research, which aims to compare the status of VHI in the health systems of Europe.