Healthcare Insurers to Withstand Chile Overhaul, Bachelet SaysJaviera Quiroga and Matthew Winkler
President Michelle Bachelet says investors in Chilean health-insurance companies shouldn’t be concerned by government plans to overhaul the healthcare system.
Asked if changes would harm shareholders in companies such as Bupa Chile SA, Banmedica SA and Inversiones La Construccion SA, which owns Consalud, Bachelet said “not at all.”
Private insurers in Chile, known as Isapres, participated last year in a government commission that reviewed the industry. The “huge majority” of stakeholders agreed on the need to improve the system, Bachelet said in an interview at the presidential palace in Santiago Tuesday.
Healthcare changes are part of her program to reduce inequality and improve services for the poor. The package will be financed by tax increases approved last year that will raise the equivalent to 3 percent of gross domestic product.
“There’s a lot of agreement on the majority of things,” Bachelet said. “It’s possible to advance, to improve the system.”
A commission set up by Bachelet last year to review the health-insurance system proposed two options: replacing Isapres with a state-controlled insurer or keeping the Isapres while preventing them from offering coverage plans with different benefits depending on gender, age or preexisting medical conditions.
Bachelet said the health ministry is working on a bill to change the industry, without saying if it would fully take one of the two suggestions.
Chileans pay 7 percent of their gross income either to the state insurer Fondo Nacional de Salud, known as Fonasa, or to one of seven Isapres. The Isapres had about 3 million clients at the end of 2012, mostly people from middle- to upper-income segments, which paid in average 98,000 pesos ($200) a month, according to data from the regulator.
Health consumer prices in Chile increased 50 percent faster than general consumer prices between 2009 and 2013, according to data compiled by Bloomberg from Chile’s National Statistics Institute.
Shares of Bupa Chile, which was acquired in 2014 by UK-based British United Provident Association Ltd for $517 million, gained 11 percent in the past 12 months. Banmedica, controlled by Grupo Penta, surged 36 percent in the same period, the best performance in Chile’s main equity index after E.CL SA, which rose 37 percent. The index climbed 6.1 percent.
The owners of Penta are currently under arrest as prosecutors investigate them for tax fraud and bribery.