Global Insight Perspective | |
Significance | Following a poor showing for the government in a public referendum over the introduction of medical co-payments, Prime Minister Ferenc dismissed Health Minister Ágnes Horváth. |
Implications | The junior coalition partner Alliance of Free Democrats (SZDSZ), the current coalition partner of Gyurcsány's Socialist party (MSZP), is threatening to withdraw its cabinet members on 30 April, prompting a very likely coalition collapse. |
Outlook | In a desperate bid to win over voters' confidence, the premier has promised to redraft the controversial health insurance bill by keeping the system entirely state-owned. |
The uncertainty over health reform in Hungary continues. following the dismissal of Health Minister Ágnes Horváth. Faced with a serious loss of voter confidence, Hungary's Prime Minister, Ferenc Gyurcsány, dismissed Health Minister Ágnes Horváth, a deputy of the junior ruling coalition party, Alliance of Free Democrats (SZDSZ; see Hungary: 1 April 2008: Junior Coalition Party Set to Leave Hungarian Government As Health Minister Dismissed). The crisis was provoked by a recent referendum, organised by the opposition Fidesz party ending in an overwhelming support to halt co-payments for doctor's visits and hospital stays (see Hungary: 12 March 2008: Hungarian Voters Oppose Healthcare Fees in Referendum). Speaking at a conference of the Hungarian Socialist Party (MSZP) the premier said, "We need to restructure the health insurance segment, but in such a manner that enjoys the support of the majority of the country, and this current bill isn't good for this," Dow Jones reported.
The MSZP are keen to keep the system entirely state-owned, whereas the reform bill envisaged the creation of 22 separate health-insurance funds where private companies would be allowed to buy minority stakes (see Hungary: 12 October 2007: Hungary Plans to Sell 49% Stake in New Health-Insurance Funds).
The future is looking dim for a continued MSZP-SZDSZ government and SZDSZ is threatening to withdraw its cabinet members by the end of April. The government is meeting to discuss recent events in a bid to ensure a smooth transition after Horváth's departure. Last year's resignation of Health Minister Lajos Molnar was believed to have been triggered by his inability to convince Gyurcsány to push forward with health-insurance reforms.
According to the Trend News Agency, healthcare reform is part of the austerity measures that have so far managed to cut Hungary's budget deficit from 9.2% of GDP in 2006 to an estimated 5.7% in 2007.
Outlook and Implications
Two Hungarian health ministers have left their post in less than a year and both departures were linked to the premier who disagreed with them over the future of health reforms in the country. There is a possibility that MSZP could sacrifice Gyurcsány and undergo dreaded early elections; but the outcome of such move may not be in its favour if it looses to Fidesz or even the SZDSZ. Although many in the party would welcome this move, the premier remains popular with several heavyweights in the party for his opposition to the SZDSZ's stance on health reform; such groups would rather see their party's parliamentary majority reduced than continue to toe the SZDSZ's liberal and economically feasible line on health and tax-reform measures.
Health-insurance reform in Hungary has been at a centre of a heated debate among ruling coalition parties for a while (see Hungary: 11 April 2007: Health Insurance Reform in Hungary Strains Socialist-SZDSZ Coalition). The SZDSZ has threatened before to leave the coalition and the fact that it has not called for the withdrawal of all its eight ministers hints at the possibility of resolving the dispute by the end of April. Other possibilities could be a temporary withdrawal, or a significant reworking of the new health insurance law. A return to an earlier version of the Socialist government's bill, whereby state-owned companies would compete with each other, involving private companies as minority investors, has also been suggested (see Hungary: 19 March 2008: Hungarian Government to Rework Health Insurance Law).