The Lower House of the Colombian Congress recently approved a controversial government proposal (Bill 339 of 2023) to shift the financing of the healthcare system from private providers to the government. The reform has faced political challenges and opposition, resulting in the resignation of the former Minister of Health and a reshuffling of the cabinet. Despite these hurdles, the Colombian legislature continues to debate the reform. It is still unclear if or when the bill will pass into law.
Background
Universal mixed private and public healthcare coverage has been provided for over 30 years through the contributory regime of the General Social Security Health System (Sistema General de Seguridad Social en Salud – SGSSS). The SGSSS, which is funded by a combination of payroll contributions and general taxation, is administered by approved private or public healthcare insurers (Entidad Promotora de Salud – EPS). EPS act are intermediaries between patients and healthcare providers (IPS).
Universal healthcare applies to Colombian citizens as well as legal residents who must be affiliated with an EPS of their choice before they start working. Benefits include inpatient and outpatient medical care, comprehensive maternity, and childbirth care as well as basic dental coverage.
Despite the advantages of the current system, which include low-cost healthcare coverage, Colombia’s Comptroller General’s Office report revealed that 80% of the country’s EPS lack the legally required financial reserves to operate. Out of 26 EPS, only five meet the necessary financial criteria, with the sector accumulating a debt of $6.4 billion. Because of this economic instability, President Gustavo Petro’s administration has made it a priority to reform the healthcare system by enhancing the role of the Colombian government and eliminating EPS intermediaries due to their financial mismanagement.
Key details
If the bill passes, the medical benefits as well as the employer and employee contributions to the SGSSS will remain the same. The reform aims to address issues of financial instability, payment delays, and bankruptcies associated with EPS. The main changes would include:
The elimination of EPS intermediaries. EPS would take on a more administrative role, providing auditing, billing services, and advising public authorities.
The centralization of healthcare funding and management under a single public entity, the Administrator of the Resources of the General System of Social Security in Health (ADRES).
The establishment of primary healthcare centers in rural locations to ensure healthcare coverage to all.
Next steps
Since it remains unclear whether the healthcare bill will pass into law, employers should monitor its progress and consider its potential impact on their employees’ healthcare access and coverage options.
Although the proposed changes do not alter employer and employee healthcare contributions, it may lead to an increased interest in private health insurance as the public system evolves. Approximately 70% of multinational companies provide private health coverage to their employees through traditional insurance policies or pre-paid medical plans that deliver care through a network of contracted medical providers.
Written in collaboration with:
Alejandra Hurtado
International Manager, People Solutions / LATAM
Lockton Colombia