Chile's Isapres Debt Soars to $1.6 Billion, Exceeding Expectations

Chile's private health insurers, known asIsapres, are facing a staggering debt of $1.589 billion (1.4 trillion pesos) owed to their contributors, according to an updated calculation announced by the Superintendent of Health, Víctor Torres, on Friday. The figure, which reflects the debt as of December 31, 2023, assumes a literal interpretation of the recent Supreme Court ruling, colloquially referred to as the "supremazo." If the mandatory 7% contribution is factored in, the debt would be slightly lower at $1.25 billion (1.1 trillion pesos).

Why this matters: The massive debt owed by Isapres to their contributors has significant implications for Chile's private health insurance market, potentially affecting the coverage and premiums of millions of people. The government's response to this crisis will be closely watched, as it may set a precedent for how similar issues are addressed in other countries.

Torres emphasized that these numbers represent"orders of magnitudes"rather than precise values, which will only become available once the court's decision is implemented and theIsapresprovide detailed contract-by-contract information. The announcement came during the second session of a mixed commission, comprising both deputies and senators, tasked with drafting a "short law" to materialize the Supreme Court's ruling on risk factor tables. The commission is set to reconvene on Monday.

Minister of Health Ximena Aguilera stated that a skeleton of the proposal has already been delivered to the Secretariat, with a focus on determining the debt amount and payment method. However, concerns have been raised about the limited time available for processing the law. UDI Senator Javier Macaya, president of the joint committees, expressed his apprehension, stating, "I don't want to commit myself, much less have the responsibility that in nine days we can have a law, when I don't even know the content of the indications that are going to be presented in this matter." He further warned that "if there is a bad short law, the system also collapses."

The Isapres system has been a cornerstone of Chile's private health insurance market since the 1980s, providing coverage to a significant portion of the population. However, the recent Supreme Court ruling, which deemed the use of risk factor tables discriminatory, has sent shockwaves through the industry. The court's decision has forced Isapres to recalculate premiums and contributions, leading to the substantial debt now owed to their members.

The mixed commission faces the daunting task of drafting legislation that not only addresses the debt issue but also ensures the sustainability and fairness of the private health insurance system. The tight deadline of May 12 adds further pressure to the already complex situation. As the commission prepares to meet again on Monday, all eyes will be on the proposed solutions and their potential impact on both Isapres and their contributors.

Key Takeaways

• Chile's private health insurers (Isapres) owe $1.589 billion to contributors as of Dec 31, 2023.
• The debt is due to a Supreme Court ruling that deemed risk factor tables discriminatory.
• A mixed commission is drafting a "short law" to address the debt and ensure system sustainability.
• The commission faces a tight deadline of May 12 to pass the legislation.
• The outcome will impact Chile's private health insurance market and potentially set a precedent for other countries.