Plan to create a single state-owned health insurer and potentially nationalize the EU member's tow private insurers was suspended by Slovakia's government on Wednesday.
"The healthcare ministry will not take further steps toward the introduction of a single healthcare insurer until the finance ministry signals its readiness to cover the costs," the government said on its website, admitting to a lack of funding to meet the 2014 project deadline.
The leftist government has pledged to slash the public deficit to below 3.0 percent of gross domestic product (GDP) this year, the ceiling for euro-zone members, as it expects the economy to rebound with 2.3 percent growth after a 0.9-percent expansion last year.
Prime Minister Robert Fico, who is known for his anti-market views, said in 2012 that he wanted one health insurer in Slovakia as of 2014.
He also threatened to nationalize the private insurers should they disagree to sell their companies to the state for a price set by an auditor.
"Suspending the plan is a wise and rational decision given that the idea (...) was harmful for Slovak healthcare from the beginning," Bratislava-based think tank Health Policy Institute said in a press release.
All Slovak citizens have to pay for health insurance, but they can choose between the state-owned General Health Insurance Company (VsZP) or two privately-owned companies: Dovera, controlled by the Czech-Slovak private equity group Penta, or the Union insurance company, owned by Dutch insurance group Eureko.
Fico, leader of the Smer social democratic party, has repeatedly criticized privately-owned health insurers for turning a profit from public funds while Slovakia's public health care system is chronically underfunded.
The premier has long insisted that public funds spent on health care should be channeled in a way that benefits health care providers.
Around two million of Slovakia's 5.4 million people are insured by the private companies.
There is little difference between the coverage, although waiting lists for certain operations are shorter for clients of private insurers.