After the skyrocketing price of health plans in Argentina in recent months, Javier Milei's government determined, this Thursday (2), that companies that offer prepaid medicine services will not be able to increase the monthly fee above the country's official inflation index.
Health plan prices have soared in the South American country since the publication, in December 2023, of the Milei Necessity and Urgency Decree, which eliminated controls on plan values, among hundreds of measures to deregulate the economy.
The day after the decree was published, at least two major health plans announced increases in their monthly premiums of around 40% for January.
In the following months, the increases continued: in one of the companies, the adjustment was 27.5% in February, 21.3% in March, and 16.9% in April, totaling more than 105% in price update notices since December.
“Health plans are declaring war on the middle class. We, in the government, will do everything in our power to defend the middle class”, wrote, at the beginning of April, the Argentine Minister of Economy Luis Caputo, on the social network X, formerly Twitter.
This Thursday, the Argentine Department of Industry and Commerce informed that the monthly fees for the plans cannot exceed the amount that was charged in December, added to the percentage variation in the Consumer Price Index since then, which would correspond to 93.3% until April and 114.6% until May.
The mechanism, according to the secretariat, will be in force until September. The secretariat also stated that, if companies refuse to limit the adjustment, customers can report them to Consumer Protection.
“If non-compliance by health plan companies is proven, a daily fine equivalent to 0.1% of the economic group’s turnover will be applied,” he warned.
Companies cite price lag
The companies, in turn, claim that their prices were out of date due to controls by the previous government.
Even so, they had to go back, applying a 20% to 25% reduction in monthly fees in May, compared to what was charged in March, as determined by the secretariat.
“The increases made in these months are the result of reducing, in part, the large gap generated between the increase in our cost structure and the monthly fees authorized by the competent authority until 2023”, wrote one of the providers to its customers.
The sector complains about the lag between inflation, the devaluation of the peso (Argentina's official currency) and the increase in medicine prices in relation to the monthly fee increases allowed by the government between 2020 and 2023.
Suspected cartelization
In mid-April, an investigation by the National Commission for the Defense of Competition, the Secretariat of Industry and Commerce determined that there was solid evidence of an agreement between health plan providers for an almost uniform increase in plan prices.
The body had then determined that this group of companies, which comprises 75% of consumers of this type of service, should reduce the value of monthly fees so that the maximum increase corresponds to the inflation rate.
Javier Milei's government also ordered the end of any exchange of information between companies about prices, services offered, costs and any other commercial information.
In addition, it determined the monthly presentation to the National Competition Defense Commission of information on the prices of each plan offered, income obtained and number of consumers for each health plan.
Source: CNN Brasil
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