Czech health insurance for foreigners under EU scrutiny

When an amendment to the law regarding foreigners’ health insurance in the Czech Republic was passed last year, then-opposition MP Zbyněk Stanjura criticised it. Now, however, as the current finance minister he is having to defend it – and to no less than the European Commission.

As the law in Czechia now stands, foreigners who stay in the country for more than 90 days must be insured with the same company: VZP, the biggest health insurance firm in the country. It insures 40,000 foreigners, the vast majority of which – 35,000 – have been added to their files since the new law came into force.

VZP | Photo: Tomáš Adamec,  Czech Radio

But the Czech Association of Insurance Companies has filed a complaint to the EU Commission claiming a violation of competition and fundamental European rights. It says that VZP has a monopoly on the insurance of foreigners enshrined in law that neither the Health Ministry nor the Finance Ministry ever agreed to.

The law was passed last year, when Andrej Babiš’s ANO party was still in power, and was lobbied for by ANO MPs and VZP board members Miloslav Janulík and Věra Adámková. Zbyněk Stanjura, an opposition member at the time, criticised the law, ironically implying that the MPs who drafted it were trying to line their own pockets. This is what he said at the time:

Zbyněk Stanjura | Photo: Michaela Danelová,  Czech Radio

"One privileged insurance company – which, by pure chance I’m sure, has the very same members of parliament who wrote this amendment sitting on its board – is trying to obtain a legally binding advantage over its competition."

But paradoxically, as finance minister, Mr. Stanjura is now the very person who has to explain the amendment to the European Commission.

One of the arguments for the amendment was that it would help hospitals to recoup the large debts racked up by foreigners with unpaid medical bills and non-existent or insufficient insurance. For example, the Motol University Hospital has debts to this effect of CZK 64 million, and the General University Hospital in Prague CZK 55 million.

But in practice, hospitals have found that the law hasn’t helped much, as VFN hospital spokesperson Marie Heřmánková details.

"The hospital will never receive most of the money owed, because the patient either disappears abroad and does not respond, or they are resident here but have no financial means."

The law has now been sent to the lower house by the Senate with a proposal to strip VZP of its monopoly position. But VZP has defended itself, saying that the law was also supposed to deal with other things, like unfair practices on the insurance market, as its commercial director Otakar Mareš says.

"In our opinion, the bill contains dangerous provisions on the cancellation of commission restrictions, which will lead to the return of unfair practices."

If the EU rules that the law is illegal, Czechia could be threatened with sanctions. But for now, the Commission is only asking for an explanation, to be submitted by the end of September at the latest.

Authors: Anna Fodor , Janetta Němcová
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