The Superintendency for Economic Competition (“SCE”) has released the findings of its Market Study on the Health Insurance and Prepaid Medical Services Sector (Case No. SCE-IGT-INAC-3-2023). The report identifies structural distortions that hinder competition and transparency in this market and puts forward a reform agenda directed at the Superintendency of Companies, Securities and Insurance (“SCVS”), the Ministry of Public Health (“MSP”), and the Agency for Quality Assurance of Health Services and Prepaid Medicine (“ACESS”).
Key discoveries include:
- High market concentration and practices that restrict user mobility.
- Lack of pricing transparency: unjustified premium surcharges without a technical or financial basis.
- Information asymmetry: 77% of users are unaware of the factors that drive their premium increases.
- Barriers to mobility and gender-based premium segmentation without technical justification.
The SCE recommends seven regulatory reforms to be implemented by the SCVS, aimed at (i) ensuring free portability of health insurance policies that preserve benefits and waiting periods when changing providers; (ii) requiring technical justification for premium surcharges that may distort pricing; (iii) establishing a local registry for reinsurers operating in the country to ensure compliance with SCVS regulations; (iv) aligning the obligations of prepaid medicine companies with those of insurance companies, including the mandatory contracting of reinsurance and compliance with equivalent minimum capital requirements; (v) adapting prepaid medicine contracts to conform with the provisions of the Organic Law of the National Health and Social Security System; and (vi) mandating individualized and confidential transparency in the provision of information to beneficiaries regarding the variables that determine premium renewal values.
Additionally, the SCE recommends that the MSP adopt measures to ensure the recognition of fulfilled waiting periods when modifying contracts within the same company and revise the current 24-month waiting period considering its restrictive effects on treatment continuity and overall market efficiency.
ACESS is encouraged to review the structure of currently approved plans to apply the principle of minimal differentiation and prevent the proliferation of products with artificial distinctions that confuse users and may distort competition.
Finally, SCE proposes the establishment of inter-institutional technical working groups to coordinate the implementation of these recommendations, reaffirming its commitment to fostering more efficient, equitable markets focused on user welfare.
Ana Samudio, Associate at CorralRosales
asamudio@corralrosales.com
+593 2 2544144
