Government performs unexpected U-turn on health reform bill

In May 2008, the governing Hungarian Socialist Party (MSZP) backed away from the widely criticised healthcare reform law. MSZP has been acting as the country’s minority government since the recent break-up with its junior coalition partner, the Alliance of Free Democrats, which had initially proposed the reform in 2006. Despite having voted twice in favour of the bill, MSZP made a complete U-turn and joined forces with the opposition parties to revoke the bill.

Health reforms lead to government split

For the past two years, the Hungarian government has been seeking to reform the country’s healthcare system through efforts which have generated widespread opposition from virtually all segments of society. In a surprise move, the governing Hungarian Socialist Party (Magyar Szocialista Párt, MSZP) voted in favour of revoking the recently enacted new heath insurance scheme. This was despite the fact that, on two occasions, the same party had previously approved the reform, which was originally put forward by the Alliance of Free Democrats (Szabad Demokraták Szövetsege, SZDSZ), MSZP’s former junior coalition partner.

In fact, the social-liberal government coalition fell apart over this very same issue at the end of March 2008, following a failed referendum on the healthcare system reform on 9 March 2008. In the referendum, the vast majority of voters rejected the reform’s most visible pillar – the co-payment scheme in healthcare (HU0804029I, HU0803029I). After the referendum, the country’s Prime Minister, Ferenc Gyurcsány, dismissed the country’s liberal Minister of Health, Ágnes Horváth, without consultation. Subsequently, at a specially convened party conference, SZDSZ withdrew its three ministers from the government and renounced the coalition with MSZP, forcing the latter to rule as a minority government.

On 26 May, at the last parliamentary voting, a surprising majority of 346 out of 386 members voted in favour of revoking the bill, uniting all parties except SZDSZ. This came as a great relief to many socialist members of parliament, who were against the reform from the outset but who voted in favour of the bill as demanded by the government and to adhere to party discipline.

Opposition of social partners

The social partners played a key role in blocking the proposed reform. The Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA) was the most effective in organising strikes and protests against the reform and in collecting signatures lobbying for a referendum on the reform. LIGA also attracted the support of many professional and civil associations, including the so-called FIRST AID for Social Health Insurance (TB Mentők), which was established with the sole objective of uniting civil initiatives seeking to block the proposed health insurance reform.

Among the professional associations involved, the Hungarian Chamber of Physicians (Magyar Orvosi Kamara, MOK) opposed the reform so strongly that the government went as far as amending the legislation and cancelling obligatory membership in healthcare professional chambers (HU0702049I). Surprisingly, although MOK had been calling for the abolishment of the medical fees in the run-up to the 9 March referendum, it changed its position right after the government cancelled these fees in response to the referendum results: the members threatened a mass stoppage of general practitioners’ services and even the boycotting of the National Health Insurance Management Fund (Országos Egészségbiztosítási Pénztár, OEP), unless the government assigned extra funds to cover the losses caused by the referendum’s outcome. In a less surprising move, the government and its newly appointed Minister of Health, Tamás Székely, immediately allocated extra funding of HUF 10 billion (about €41.14 million as at 18 June 2008) and a recalculation of the assignment paid by OEP.

Commentary

The extensive opposition to the reform of Hungary’s healthcare system has resulted in an unexpected political development – namely, the astonishing increase in the number of referendum initiatives. One such referendum already took place on 9 March and a new one is foreseen for the autumn of 2008, while others are still in the pipeline. In the upcoming referendum, recently approved by the parliament, citizens will vote on the proposed business-oriented social security system, with the introduction of multiple insurance companies. LIGA played a major role in collecting signatures for this referendum.

Beside the high costs involved in organising such referendums – for instance, the forthcoming one has an estimated cost of HUF 3.7 billion (€15.2 million) – such initiatives also raise questions about the effectiveness of Hungary’s representative democracy. They may also undermine the ability of any elected government to govern its people and also its credibility.

Márk Edelényi, Institute for Political Science, Hungarian Academy of Sciences

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