Population aging raises health insurance costs in Brazil

The estimated aging of the Brazilian population and a rise in medical costs should increase health insurance prices by 2030, says Leandro Fonseca, head of the National Regulatory Agency for Private Health Insurance and Plans (ANS). A forum organized by the American Chamber of Commerce (Amcham) in São Paulo discussed the matter this week.

ANS estimates that one of every four Brazilians has a health insurance plan. The sector performed more than 1 billion medical procedures in 2016 and handled $50,360 billion.

Leonardo Paiva, a representative from the Brazilian Health Regulatory Agency (Anvisa), says that Brazil is expected to undergo a demographic transition before becoming a developed country, which makes the challenge even more difficult. By 2060, the 80-plus age group will have skyrocketed to 19 million people, according to the Brazilian Institute of Geography and Statistics (IBGE).

“We'll have a shift from infectious diseases to chronic illnesses [more common among the elderly]. The industry is preparing for this”, Paiva declared.

Court cases

According to Paiva, Brazil's public health system must be ready for the rise in the prices of medication targeted at older people, who suffer from chronic diseases. He foresees an increased number of court cases forcing the government to pay for the medication.

In 2015 and 2016, $310 million were spent per year on the 10 most requested drugs in court.

Management

The lack of good management among health insurance providers is another issue mentioned by Fonseca. He noted that Brazil has up to 900 providers, 125 of which cover 80% of beneficiaries. Fonseca also remarks that many clients undergo unnecessary medical exams for lack of information. As an example, he mentioned 132 magnetic resonance scans for every thousand people, which he described as above normal.

“There is a huge waste of resources because beneficiaries are not told to search for alternatives within the treatment network. The solutions are using the insurance judiciously and revamping the system,” he said.

Legal problems

Faced with the difficulties, the best health care professionals leave the providers and service quality deteriorates, Fonseca argues. When health insurance companies go through financial difficulties, they are seldom acquired by other firms due to the risk of further legal problems.

“There is no wholesome alternative, legally speaking, for companies being acquired. Its services grow worse in a process that can take six years. In only 20% of the cases there is a recovery and a return to the market.”

Translated by Mariana Branco / Fabrício Ferreira