A bill was presented to re-regulate the prepaid health insurance companies

National Congressman Martin Tetaz presented a bill for Prepaid Medicine after the increases of the last months, as a result of the price liberalization by means of the DNU of President Javier Milei last December.

The legislator explained: "It is appropriate for the State to regulate prepaid medicine. Once the rates were deregulated, we did not observe that the doctors are better, that the attention is better and that there is a higher frequency of appointments. The only thing that can be observed is a very marked increase to the benefit of the prepaid companies, therefore it is necessary to repeal the article of the DNU and go back to December".

Since the publication of Decree 70/23, the fees had increases of 40% in January, 30% in February and 23% in March on average.

"This situation brought about increases of up to 60% in several cases in one month since the entry into force of the DNU. The current scenario of recession and inflation that society has been going through in the last few years has meant that the members of these health services cannot afford the current fees with exorbitant increases and in many cases they have gone to court to request that the company be condemned to cancel the increases", The bill presented by Tetaz and signed by Congressmen Danya Tavela, Marcela Antola, Melina Giorgi, Gerardo Cipolini, Gabriela Brouwer De Koning, Mariela Coletta, Carla Carrizo and Pedro Galimberti, stated in the grounds of the bill.

"The decision taken regarding the deregulation of the prepaid medicine companies does not seem to have improved the quality of the services provided, nor that the doctors are better paid, even generating inconveniences in the quality of life of the citizens affiliated to such institutions", they argue.

"Furthermore, since it is an oligopolistic market, competition is scarce and does not guarantee the setting of an accessible price and the quality of the provision of a good service. And since we are dealing with health issues, being a market with oligopolistic characteristics, the State cannot dispense with the regulation of tariffs, which is why we advise the repeal of the aforementioned articles", they add.

In an interview with Infobae, Tetaz said: "In the economic theory that we learn and teach in the faculty and in the experience of all the liberal countries in the world, prepaid medicine and medicines are regulated, and the criterion is that the price should be equal to the marginal cost. We want prices to be equal to the marginal costs of service provision. We do not seek to freeze prices as Kirchnerism did. That was a lousy regulation. But the fact that we have suffered a lousy regulation for many years does not imply that the best thing to do is to eliminate all types of regulation".

It is worth mentioning that, according to the last presentation of the registers to the Superintendence of Health Services (May 2022), 6,796,690 people are affiliated to prepaid medicine companies. Approximately 40% of these affiliates are direct members, while the other 60% come from the derivation of contributions via corporate plans or the deregulation of social security companies. This means that just over 14.77% of the population has private medical coverage.

The sector justifies the increases on cost increases and on the fact that the premiums had fallen far behind the inflation of the last few years.

"The costs were going up the elevator and the updates (of the premiums) were going up the stairs, which generated a huge deterioration", said Claudio Belocopitt, the owner of Swiss Medical and president of the Unión Argentina de Salud (UAS).

Deregulation of social works: will prepayment fees increase?

On the other hand, the national government deregulated the social works and workers will be free to choose between a social work or a prepaid health insurance company. At the same time, beneficiaries will no longer be obliged to remain for one year in the social security system of their activity when taking up a new job.

"I fully support the Government's idea that people may choose the derivation of their contributions. Milei's deregulation is good, but they created a new tax that makes prepaid health insurance companies unviable," said Belocopitt. This is a 20% contribution that companies will have to pay to the Solidarity Redistribution Fund (FSR) under the new regulations.

For the prepaid medicine entities grouped in the UAS, this new 20% contribution will raise the costs of coverage in a healthcare system that "is already extremely stressed" and they maintain that it will be difficult for the providers to absorb and that they will have to increase their rates to cope with it.