The ruling Social Democrats and Green Party, along with the Left Party, have agreed to move forward with the hot-button issue, which would cap how much a private company could make when it's funded by the state.
The cap will be for companies that run schools and care facilities such as homes for the elderly, while hospitals and health care clinics are not included in the plans, for now.
However, if the measure will come to Parliament, it will all but surely be voted down. The Alliance, Sweden's four-party opposition coalition, as well as the Sweden Democrat Party said they will vote no on any limit, garnering more than enough votes to stop it.
What was not made clear was how much of a limit the parties would place on the businesses.
"Our starting point is that taxpayers' money will go for what it is intended for, we will not have any big profits. It's about the legitimacy of Swedish welfare system," Civil Affairs Minister Ardalan Shekarabi, of the Social Democrats, told Swedish Television on Sunday.
The issue has been floated before and shot down by the government though the Left Party has long argued for a cap or an outright ban on profits made by private companies in the welfare system.
In November 2016, a government-launched investigation into private companies running Sweden's schools, health and elderly care services recommended limiting profits to 7 percent.
Jonas Hinnfors, a professor of political science at Gothenburg University, told Radio Sweden that the Social Democrats have been under pressure to move forward with the proposal. But, he said, it is unclear whether voters will welcome or reject the idea as next year's national election draws near.
"There will be a lot of debates... and then we may start seeing new trends among the voters," Hinnfors said.