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STOCKHOLM (Reuters) - Sweden's government has dropped a plan to cap profits made by tax-funded healthcare companies, Social Minister Annika Strandhall said on Sunday.

A government commission in 2016, headed by Social Democrat politician Ilmar Reepalu, had called for a cap on profits for all private companies firms operating in the education and welfare sectors that received tax money.

The government plans to put a bill to parliament in March to limit profits for privately operated but tax-funded schools.

But Strandhall, the minister for health and social affairs, said there would not be a cap for private healthcare firms that receive tax money.

"We do not believe that the model which Ilmar Reepalu proposes with a profit cap is the one we want to have in healthcare," she told the newspaper Dagens Industri.

Minister for Public Administration Ardalan Shekarabi said in a signed article in the daily Dagens Nyheter the government would appoint a commission to look at how private healthcare operators who get tax money use that funding.

"A large majority want to see the hunt for profit in welfare stopped," Shekarabi said.

"The government and the Left Party are agreed that we must ensure that our taxes go to what they are intended for."

(Reporting by Simon Johnson, Larry King)

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