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ARGENTINA | 09-04-2024 16:19

Private health firms targeted as Caputo complains of 'war on middle class'

Economy Minister Luis Caputo accuses ‘pre-pagas’ of declaring war on customers as government sources say investigation into price-fixing claims is underway; Firms seek urgent meeting with officials.

Argentina’s private healthcare firms are making unwanted headlines thanks to soaring prices, ministerial complaints and a potential investigation into price-fixing.

Premiums are soaring in the country, which is besieged by economic crisis and runaway annual inflation exceeding 270 percent. Consumers have suffered double-digit hikes in the price of the schemes over the last five months, with a top minister describing the increases this week as an “attack” on the nation’s middle class.

Officials in the government of President Javier Milei, who last December deregulated the market via decree, removing controls that limited prices, is now investigating the private healthcare providers in response to claims of price-fixing.

Economy Minister, Luis ‘Toto’ Caputo this week trained his ire on the operators of private healthcare schemes, accusing them of “declaring war on the middle class.”

The government will “do everything within our reach to defend the middle class,” the official posted on social media.

It isn’t the first time officials have expressed concern. Last Friday, in a television interview, Caputo said that the firms “had gone too far with their increases.”

It emerged midweek that the Comisión de Defensa de la Competencia (Commission for the Defence of Competition, CNDC) is investigating if there is a price-fixing pact between the providers.

A source at the Commerce Secretariat confirmed to the Noticias Argentinas news agency that "there is an ongoing investigation."

The news puts the Milei administration in an unusual position – supporting claims previously filed by opposition leaders earlier this year. 

The price increases are especially painful for the elderly, who cannot switch companies due to pre-existing conditions, leading to higher premiums.

A number of individual legal challenges have been filed in the courts by citizens against the increases, though there is no court decision in place limiting the hikes authorised by Milei’s emergency decree.

With Decree 70/2023 currently in force, the government lacks the tools to curb the price increases and can only appeal to the good will of companies to slow increases. 

A report from the Instituto Argentino de Análisis Fiscal (IARAF) published this week showed that premiums have risen on average by 59 percent in the last four months, now representing around 30 percent of the salary of those who access them.


Dominance

Argentina’s private healthcare market is dominated by a few firms, many of which are grouped together in the Unión Argentina de Salud business chamber, led by Claudio Belocopitt, the head of the Swiss Medical Group.

Other leading providers include Galeno, OSDE, OMINT, Medicus and Sancor Salud.

The price increases stem from the de-regulation of the sector ordered by President Milei in Emergency Decree 70/23, issued December 20, 2023. 

The DNU, which remains in force but could still be repealed by Congress, suspended articles of law granting the health service superintendent’s office powers to supervise and ensure “the reasonableness of premiums for health plans.”

Since its introduction, operators have hiked prices, a move the firms say is due to soaring inflation and the rising costs of services and medicines.

The companies have raised premiums by double digits for the last five months. On average by 30 percent in January, 26 percent in February, 23 percent in March and 19 percent in April. 

Sources from the sector say they are seeking urgent meetings with the government in order to “explain the situation.”

The business chamber that groups together the firms, the Unión Argentina de Salud, said in a statement that it wished to provide the government will “all the available information which explains, among other things, the underfunding the sector has sustained for years.”

“We believe the situation to be extremely serious,” said the groups, which highlighted increasing costs for care, equipment and medicine.

“We value the Argentines who have chosen this system and we intend to do everything in our power for them to continue to do so. Yet, they have to understand that private health insurance companies do not set prices,” it continued.

“The impact of inflation in this country affects all our costs equally, as it affects every Argentine family,” read the release, which said the firms are “willing to accompany the government’s efforts to solve our country’s substantive issues.”

 

– TIMES/PERFIL
 

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