The Government wants prepaid companies to lower prices and caps increases due to inflation. freepik
The Government released the list of prepaid medicine companies ordered to roll back the sharp increases in their health plans to December, after the liberalization of prices, and which are also accused of cartelization. The official estimate is that, starting from the ceiling of increases set by inflation, the fees should drop by an average of 33% compared to their current levels.
The lending companies calculated that the decline would be 25% if the measure becomes effective. However, in the sector they warned of a “risk of breakdown” of the system if progress is made in that direction. In Argentina, almost 7 out of 10 people have some type of private coverage while 90% of the middle class has the service according to numbers from economist Milagros Gismondi.
In any case, the Government’s request does not currently contemplate a refund to customers for the surplus they paid in the last four months. The Health Superintendency did present a precautionary measure before the Court so that the amount above the Indec Consumer Price Index (CPI) be returned to the affiliates.
The companies investigated since January by the National Commission for the Defense of Competition (CNDC), which depends on the Ministry of Commerce and Industry, and affected by the measure are:
- Galeno Argentina SA
- British Hospital of Buenos Aires Civil Association
- German Hospital Civil Association
- Medifé Civil Association
- Swiss Medical S.A.
- Omint SA Services
- OSDE Organization of Direct Business Services
- The Argentine Health Union (UAS), the confederation that brings them together
- and Mr. Claudio Fernando Belocopitt, in his capacity as current president of the Swiss Medical SA firm and then president of the UAS.
The request only includes 75% of the prepaid medicine companies because the Civic Coalition’s complaint to the CNDC was to the firms mentioned above. This is what official sources explained to Infobae.
The announcement was made by the presidential spokesperson, Manuel Adorni.
“It is estimated that April inflation will be 10%, and taking into account that prepaid medicine fees have increased on average by 151% since December, the measure will reduce the prepaid fee by 33%,” he reported. the Ministry of Commerce and Industry, headed by Pablo Lavigne and leading the investigation.
From the private health sector they were forceful in an off-the-record talk with Infobae after the measure was known. “If this measure has to be applied as announced, it will bankrupt the private health system, but not within six months, it will bankrupt within 60 days,” they said. The preliminary calculation they made showed that “the fees should decrease by 25% since they increased on average 6% or 7% above inflation.”
For some time now, the Government had been dissatisfied with the increases they applied since the deregulation of the sector starting with DNU 70/2023 by Javier Milei. The Minister of Economy, Luis Caputo, accused the prepaid companies of “declaring war on the middle class.”
In this context, the CNDC indicated that it began an investigation in mid-January into alleged anticompetitive conduct in which it determined that there were “multiple indications” of a “collusive agreement” between the country’s main prepaid medicine companies. The organization issued an opinion to Lavigne to adopt an advance protection measure so that the group of prepaid companies mentioned, the AUS and Belocopitt, meet certain requirements.
Claudio Belocopitt, president of Swiss Medical and former head of UAS.
Firstly, the Government established that the values of the health plan fees to be collected cannot exceed the level they had as of December 2023 plus the variation in the CPI. The measure contemplates that for clients registered after that period the adjustment must be made based on a plan similar to the one contracted at values at the end of last year.
Likewise, the indicated companies must present to the CNDC information on nominal prices of each health plan offered, income obtained and number of members in each of the programs. “They must provide data from December 2023 onwards, and report their updates on a monthly basis. In turn, the companies and the UAS have the obligation to publish, within a maximum period of 10 business days from the notification of the precautionary measure, the full text of the anticipated protection measure on their respective websites,” Commerce detailed. .
As explained by the Government, the opening of the investigation, which is still ongoing, was carried out based on a complaint to the CNDC for cartelization in the terms of article 2, paragraph a), of the Law on Defense of Competition, “in by virtue of the coordinated increase in the prices of the prepaid medicine plans of the detailed companies.”
“Agreements between competitors or concerted practices, commonly known as cartels, constitute a serious violation of competition legislation, which can lead to fines of up to 30% of the turnover of the offending companies in Argentina. In particular, article 2 of the Law on the Defense of Competition classifies hard core cartels as absolutely restrictive practices of competition, which consist of an agreement between two or more competitors to fix prices, restrict supply, share the market or coordinate bids, contests or auctions.”
One of the companies made an offer to Commerce to freeze their quotas and not continue with the increases to make up for what they consider to be years behind, but they said that, when they put it on the table, the official response was that it was too late and that the The deadline to present alternatives had expired.
In the private health sector they warn of a possible breakdown of the system. (Shutterstock)
“We don’t know what they want,” agreed another of the largest companies in the sector. “Prepaid companies are the enemy they chose now, but the one who deregulated the prices of the sector was the Government itself, with the DNU of December. Before they were the hegemonic media, now it seems that we are the prepaid ones,” they added. “The measure involves not only prepaid companies but all providers, salaries, professionals, etc. “It is a bomb on the entire private health system,” they said.
“In addition, they want to return what they already charged above the CPI according to the precautionary measure they presented. In other words, the prepaid companies have to ask the providers, to whom they have already transferred the funds from the fee increases, to return the money to them in order to return it to the members. But the providers no longer have those funds because they paid salaries, supplies, suppliers, medications. The prepaid ones that can will have to use their funds. They last a month and go bankrupt, and if the prepaid ones go bankrupt, the entire benefit system breaks,” they detailed.
From the sector they list that Argentina’s private health system serves 33 million people. Of that figure, 6 million are in prepaid plans and of them, 4.5 million are in corporate plans, which are paid by their employers and 1.5 million are direct partners. “Of those direct partners, the problem really was approximately 1 million people. But they took one measure for everyone, it is unusual. The Superintendency of Health Services knows that this measure is unfeasible,” they concluded.
