Health insurance bill passed despite nationwide protest strikes

As part of a larger reform package launched in 2006, the Hungarian government has embarked on measures to privatise part of the health insurance system. The proposed health insurance bill, criticised by opposition parties and trade unions, led to a wave of nationwide strikes in late 2007, with professional associations and civil groups staging national-level demonstrations and street rallies. However, the bill was eventually passed, with only minor changes, in February 2008.

Background

The healthcare bill is part of a series of government measures that aim to reduce the budget deficit by attempting to create more customer-oriented but also cost-effective public services. The proposed healthcare reform seeks to partially privatise the management of the health insurance system. Although the bill maintains the universal social security system, it will replace the management of the current central health insurance management fund with 22 regional health insurance management funds which will compete for customers. Private companies may own up to 49% of the assets of these funds, but will have management rights and will organise health service provision (HU0803029I).

Bill meets strong opposition

The proposed bill has attracted widespread resistance across many sections of society. The opposition parties, led by the Alliance of Young Democrats–Hungarian Civic Party (Fiatal Demokraták Szövetsége–Magyar Polgári Szövetség, FIDESZ-MPSZ), has also heavily criticised the bill. The opposition highlighted the widespread fear that the reform would eventually lead to the break-up of the universal social insurance system and the introduction of a health insurance system based on competing insurance funds, similar to that found in the United States (US). A large number of doctors, along with their chambers, also protested against the planned reform. As a result, the government received virtually no support for the proposed reform, with the exception of the support of the employer organisations.

Social dialogue fails to reach consensus

On 15 October 2007, the bill was the subject of consultation at the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT). Trade union confederations unanimously rejected the reform proposal. In light of this, the Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA) warned the government that a nationwide protest would be organised for 21 November if it failed to withdraw the bill. Employer organisations, on the other hand, supported the reform proposal.

Industrial action goes ahead

LIGA had called a one-day protest for 21 November as early as 28 September, protesting against various government measures, including the reform of early retirement regulations and, consequently, an alleged increase in social inequality. On 12 October, LIGA announced that the bill on healthcare management funds was the main reason for the planned protest day.

Among the national trade union confederations, only the National Federation of Workers’ Councils (Munkástanácsok Országos Szövetsége, MOSZ) joined LIGA’s protest initiative. However, on 9 November, the President of FIDESZ, Viktor Orbán, met with the President of LIGA, István Gaskó, and expressed full support for the protest against the government’s measures.

Despite LIGA’s unilateral call for protest action, the four other trade union confederations – the National Association of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ), the Trade Unions’ Cooperation Forum (Szakszervezetek Együttműködési Fóruma, SZEF), the Confederation of Unions of Professionals (Értelmiségi Szakszervezeti Tömörülés, ÉSZT) and the Alliance of Autonomous Trade Unions (Autonóm Szakszervezetek Szövetsége, ASZSZ) – did not join in the initiative. Instead, these unions called for a separate demonstration against the bill, involving the participation of MOSZ, in front of Prime Minister Ferenc Gyurcsány’s office on 10 November. According to media reports, about 1,000 people participated in this demonstration, although the protest did not appear to have any major impact on the political discussions.

In the meantime, LIGA cleverly added a number of other issues to its protest day agenda, namely, the closure of 38 secondary railway lines (HU0711029I) and changes to the early retirement scheme affecting bus drivers. As a result, key trade unions belonging to other confederations – most notably, the Trade Union of Hungarian Railway Workers (Vasutasuk Szakszervezete, VSZ), affiliated to MSZOSZ – joined the strike action. Nonetheless, only one hospital took part in the strike on 21 November.

The protest day mobilised between 10,000 and 20,000 workers. However, the impact of the strike action was greater than these figures suggest, as railway services stopped nationwide, while partial strikes took place at Budapest Airport and at a number of public bus transport companies. The strike attracted nationwide attention and extensive media coverage. On the same day, LIGA organised a rally in front of the parliament buildings in Budapest, expecting tens of thousands of people to participate; however, only about 5,000 people took part. Following the official demonstration, a few hundred right-wing radicals seized the opportunity to generate street turmoil in a section of the city.

LIGA steps up protest action

Following the protest day, LIGA called for another demonstration in Budapest for 15 December 2007, along with a nationwide general strike for 17 December – the same day that parliamentary voting on the healthcare reform was scheduled to take place. Furthermore, LIGA threatened to continue the strike should the parliament pass the bill.

In order to reduce the impact of the planned national strike, the government rapidly withdrew its plans to close the secondary railway lines and agreed on early retirement measures with the bus drivers’ trade unions. However, the Free Trade Union of Railway Workers (Vasúti Dolgozók Szabad Szakszervezete, VDSZSZ), affiliated to LIGA, refused to join the agreement signed by the other three rail unions. Nevertheless, the government had managed to ensure that VSZ and the bus transport unions not belonging to LIGA did not join the national general strike. Moreover, in relation to the pending dispute at the Budapest Transport Company (Budapesti Közlekedési Vállalat, BKV), a last-minute agreement on staff reduction measures also attempted to avert the strike action planned for 17 December.

At this point, LIGA’s President, Mr Gaskó, offered to compensate members of parliament (MPs) of the Hungarian Socialist Party (Magyar Szocialista Párt, MSZP) using resources from the strike fund if they voted against the reforms and were, as a result, fined by their own party. This controversial move attracted further media attention for LIGA.

On 10–11 December, a poll commissioned by the prime minister’s office found that 63% of respondents supported the general strike of 17 December, while 31% opposed it and 6% were unable or unwilling to respond. On 13 December, a public debate culminated in 150 leading intellectuals, politicians and trade union leaders petitioning MPs of the governing coalition, requesting that they vote against the health insurance bill.

FIDESZ once again expressed its support for the protest and organised automated phone-calls to mobilise people for the demonstration. On 15 December, a peaceful demonstration took place, which, according to police estimates, only involved between 700 and 800 participants.

On the 17 December round of the strike, LIGA had managed to secure the support of its most important new allies, which in this instance came from the healthcare sector. Thus, the 14,000-strong Federation of Hungarian Physicians (Magyar Orvosok Szövetsége) and the Democratic Union of Healthcare Employees (Egészségügyi és Szociális Ágazatban Dolgozók Demokratikus Szakszervezete, EDDSZ), the major trade union in the healthcare sector which is affiliated to SZEF, joined the strike. A right-wing farmers’ group also took part in the demonstration and organised partial roadblocks at 32 locations throughout the country in support of the strike. Although only one of the rail unions, namely the LIGA-affiliated VDSZSZ, went on strike, railway services were virtually paralysed on the day. Work stoppages also took place at a number of hospitals, elementary and secondary schools, as well as at Budapest Airport and a dozen other workplaces. LIGA estimated that about 32,000 employees in total participated in the strike action.

Bill passed despite widespread opposition

Despite the ongoing strike action, the Hungarian parliament passed the health insurance bill. Subsequently, LIGA and MOSZ called off the general strike, while LIGA requested that the country’s President, László Sólyom, refuse to sign the bill. On 27 December, the president did, in fact, return the reform bill for MPs’ reconsideration, arguing that it lacked social and political consensus and that its long-term effects were unpredictable. However, in the end, following only minor changes, the parliament finally adopted the new law on 11 February 2008.

Calls for referendum on healthcare privatisation

Following the strike action, LIGA joined an already existing referendum initiative against privatisation of the universal healthcare system. To support the initiative, an extensive coalition of non-governmental organisations (NGOs) has been formed, in which LIGA has emerged as a key organisation. The initiative has also received the full support of FIDESZ. By the end of February 2008, civil groups had collected some 359,000 signatures – well over the number required to initiate a referendum.

Commentary

The government, already unpopular due to last year’s austerity measures, has taken a great political risk in introducing the healthcare reforms. The reform plan has attracted widespread resistance, particularly from the trade unions. Nonetheless, the different trade union confederations have chosen diverging strategies: LIGA and MOSZ embarked on a strategy of confrontation, while other trade union confederations did not follow suit. Despite the failure of these measures to halt the reform, LIGA’s actions have enhanced its image as a capable and ‘radical’ trade union confederation. On the other hand, the fact that LIGA did not coordinate its actions with other trade union confederations – some of which supported the position of MSZP or others of which pursued a politically neutral stand, but still built an alliance with the major opposition party, FIDESZ – weakened LIGA’s national strike actions somewhat in terms of participation.

The events during the last few months of 2007 have also shown the relative weakness of trade unions in terms of their organisational strength and mobilising capacity. Even in this particular instance, where the majority of the population rejected the government’s reforms and supported union action, the trade unions were unable to mobilise more than 1,000–5,000 people for the demonstrations and any more than 10,000–30,000 employees for the national strike actions.

András Tóth and László Neumann, Institute for Political Science, Hungarian Academy of Sciences

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