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Health Ministry not concerned about arbitration threats

The Health Ministry said on November 26 it has no fear of court disputes and arbitration prepared by health insurance companies. The draft bill on health insurance companies protects the interests of all Slovak citizens and not just a small group of corporate entities behind private health insurance companies, the ministry said in its statement.

On Friday, the Penta private equity group announced that it is preparing a motion for the Prosecutor General’s Office. It is also getting ready for international arbitration to fight the draft bill, which stipulates that insurers have to return their profits from public health insurance to the system.

The Health Ministry quoted constitutional expert Ján Drgonec as saying that health insurance companies had not entered an environment that was supposed to be market-based.

"It was clearly announced in advance that competition and business have no place in health insurance," Drgonec said. “If it comes to disputes, they will certainly be more complicated than (the companies have) currently presented.”

During the parliamentary vote, a proposal suggesting that health insurers reinvest their profits into the system for the first time no sooner than in 2009, based on their results for 2008, was dropped. Health insurance companies will have to return their profits reported for 2008 to the system starting next year.

The Association of Health Insurance Companies called the amendment seriously flawed, saying this is a case of retroactivity. The regulation that defines how the profit of health insurers is to be used is not clearly formulated, it said.

Under the approved revision, health insurance companies will not have to pay income tax on profits that are returned to system. But this provision will only enter into force in 2009. This means that next year, the health insurers will be obliged to return the profits to the system but they will also have to pay income tax on the money they return.

Health insurance companies are still preparing themselves for international arbitration proceedings, which are expected to begin after the amendment comes into force in January 2008. The insurers are also working on motion addressed to the Slovak Constitutional Court.

They have also not ruled out asking for a preliminary injunction to stop the law from taking effect.

-SITA

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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