"Health Insurance Conclusions. an EEKEc. a( BUFETE 2. Social Security and Banking Experience

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1 Marcela Flores "Health Insurance a( BUFETE DE an 2. Social Security and Banking Experience 3. New Law - ISES (Health Especialized insurance Companies 1 4. Conclusions. iaca

2 The Social Challenge Increase in work force Elder people without social security coverage Change in the dependency rates Current workers without coverage Evolution in the jobs market Long term increase in the Social Security System demand Poor Fight iaca

3 Demographic Transition ;.\... <... Total Population: 48,225,238 :... Totnl Populntlon: 96,254, [ The Population grew to double in 28 years I Epidemiologic Transition a In Mexico the demographic and epidemiologic transition change the priorities in the health attention. Infectious and sickness.

4 General Mortality and Life Percentage of Dependency GROUP % I years or more 6.4 total years or more 14.8 total 48.1 The young population continues being the higher part but is changing iaca

5 Survival Rates (Sx) AGE Mortality Rates ' ~. Rj MFN El WOMEN / ELmn &w.mo~ LESS BORNS inca

6 Mortality Distribution by ages groups Ages (0-9),(10,74),(75+) Mexico Main Factors: Health and Education Infant average mortality rate related with school level of the mother , Deaths per 1000 borne O NO SCOLARSHIP INCOMPLETE FINISliED MIDDLE SCHOOL ELEMENTARY ELEMENTARY OR MORE inca

7 Main Factors: Health and Education Fertility rate related with school level of the mother 1997 number of born children per mother '40 SCOLARSHIP INCOMPLETE FINISHED MIDDLE SCHOOL ELEMENTARY ELEMENTARY OR MORE Population Concent ration Population distribution per size of community 1 (Size of the place Total ,31: % Total YO 100-4,999 48,463 5, ,999 1, ,000 or more 1 Community I Population 1 iaca

8 Social Government Policy Priority in Social Expenses: I rn rn In 1988,33% of government expenses 5.8% GDP. In 1999, 59.2% of government expenses 8.9% GDP. Government Expenses in Social Programs SOCIAL SECURITY POORNES L m ~ ~ TRAINING HEALTH EDUCATION iaca

9 Current Mexican Health System 0 e L U) c I I I Insured Population Formal workers Social Security System IMSS 8 I0 - ISSSTE t 2 47 n Opened Population Social Health Department V) V) - r & 9 - In 0 Limited access to services millions SOCIAL SECURITY EXPERIENCE iaca

10 Incomes to Health and Maternity Social Security Insurance Employer Contributions Fixed quote of 13.9% of a minimum monthly salary and 5.02% for the sala that exceeds 3 times the minimum s per month plus an average of $30 dollars in salaries over 3 times the minimum ~~~l~~~~ contributions 3.2% for the salary that exceeds 3 times the minimum. An average of $18 dollars in salaries over 3 times the minimum ~~~~~~~~~t contributions Fixed quote of 17% of a minimum monthly salary and. $21 dollars per month -- Total Incomes $37 dollars per month for salaries lesser than 3 times de minimum $85 dlls per month for higher salaries Current Social Security System rn rn The Health Social Security are based on Models which contend among them in a manner without efficiency and profitability Non- union employees looks for major medical expenses programs and do not use the social security coverage Social Security subsides the poor people but does not offer good quality of services It makes necessary complimentary coverage for those that can pay for them iaca

11 Current Social Security System a Public assistance is based in government's direct assignments (federal, estate and municipal). But in lot of small communities the Social Security offers the coverage Private Coverage is taken for small group of people and the cost is expensive, because there are not doctors and hospital charges control Health Attention Levels and Costs 65% of cost 85% Health Problems 35% of cost

12 Percentage of Population Without Social Security Coverage, Groups of Age and Minimum Salary AGE LESSTHAN MORE THAN GROUP I/1 Minimum = $1,400 Dollars Per Year) I 1998 lnformation Population of More than 65 Years Old Without Social Security Coverage GROUP OF AGE 65 a a a y mas 61.5 Total 1998 lnformation iaca

13 Before 30's 30's 40's 60's 's Miner companies. Social medical services. IMSS' establishment. Mayor Medical Expenses introduction. Banking out of Social Security with quotation reimbursement First Insurance Comp. Network appears Appear 30 health administrators. Possibility of operating full health coverage for insurance companies. New Law for Health specialized insurance companies(lses). New Law Rules started iaca

14 Banking Profile For many years, the Mexican Banking Institutions are being out of the Social Security System health coverage. (Self - administration plan). The cost for the Banks is more than 3 times the Social Security Contributions. They have been reducing coverage in last years The reimbursement of quotations to social security will be a problem of incomes to the social system LEGAL CHANGES FOR A NEW SYSTEM iaca

15 Health Insurance in Mexico We armgoiqpcbcb8kr coverage models: rn Pre-pay Medicine Health Maintenance Organizations (H.M.O's). rn rn Preference Providers Organizations (P.P.0's). Networks of Doctors and Hospitals Legal Changes: Backgroun December '99: Health lnsurance Specialized Companies were initiated, for the first time, in Mexico. "lnstituciones de Seguros Especializadas en Salud". (ISES) iaca

16 Health Insurance in Mexico. I Objetive: I w To give services for promoting and restoring health through medical professionals. Fundamental Concepts on Health lnsu rance in Mexico $5&-" -%& Prepaid Services. Technical risk. Financial Risk. Quality and suficiency in medical services. Work more in prevention than in cure deseases iaca

17 r suficiency and Quality in Medical Servlces. 1 Guaranty in quality and availability of medical services and care to the insured I Prepaid Services. Technical Risk. Money paid in advance to get future medical services. (v.gr.annuai clinic office hours), Financial Risk. Probability Analysis in estimating future contingencies. (v.gr. Number of deseases events or mayor medical treatenients.) Actuarlal approach In handllng the income of prepaid services and health insurance ~remiums. I Regulation and Supervision Operations and Services Supervision. Health Secretary's Office.(HSO) Technical and Financial Supervision. Insurance Cotnmissioners.(lC).

18 Conclusions w w w The financing of health and long term care will become a problem for Mexican Government if financing continues on the current basis. The population without coverage represents an important social risk, linked to the unemployment and extreme poor. Measures to reduce the demand for high cost procedural services are needed iaca

19 Conclusions It is obvious that these important health costs, in Mexico, can not be estimated with reasonable adequacy if we do not take in account other countries experiences Mexico, by its economical and social youthfulness, is a country which still "can select", against the old economies, where it is difficult to think in new paradigms. An era of big changes is of great opportunities too. ITO develop an integral system that : I w Give support to the old age. Give protection to whoever pay. Give security to whoever not have resources. Give priority to whoever are more vulnerable. iaca

20 Conclusions Technical and Financial Supervision. Actuarial Opportunities D Actuarial Technical Notes. Reserves. M Investments. D Garanteed Minimum Capital rn Policy forms. Reinsurance. Information System. The New system can be a solution for those that can pay for services but something linked with other social programs should be done for the very poor ones. We need be more proactive in modeling and estimating the costs and the future liabilities and necessities iaca

21 r There is lot of work and important challenges for actuaries in order to improve the health system in the better way