Under the Chilean healthcare system the purchase of health insurance is mandatory and there are 2 main service providers:
- Fonasa – public plans
- Isapres -private plans
Health insurance is funded through a 7% tax that is levied on the wages of salaried employees. These funds are put into an account with which the employee can choose which sector –public or private- they would like to subscribe to.
People who choose for Isapres can select insurance plans from different private companies with varying plans and levels of coverage, whilst the public sector Fonasa offers a set program with 4 income-based plans. (Described in further detail in the section below “Public Insurance”.)
It is also possible to remain enrolled under Fonasa and seek certain private care services in the private sector at the charge of a copayment (calculated based on the patient’s income).
Public and private insurance market split
- About 81% of the Chilean population is insured under the public health insurance scheme, Fonasa.
- A small percentage of around 3% of this public coverage is covered under the Ministry of Defence (these are employees of the police and armed forces).
- 5% of the population contracts private insurance through Isapres.
- Around 1.5% of the population have no coverage at all.
Independent contractors such as medical professionals and attorneys are exempt from the 7% tax, and must purchase either Fonasa or Isapres through OOP.
The vast majority of Chilean citizens are covered under the Fonasa plan because their wages are not enough to cover a sufficiently comprehensive private Isapres plan.
Rules and regulation
There is currently no sanction for those who refuse to buy insurance; however, citizens (exempt from the 7% tax) choose to purchase a plan because medical costs can be quite high in Chile for those without insurance coverage.
Unpaid debts are recorded in a system called Dicom, run by the American company Equifax. Medical debts listed in Dicom impact an individual’s credit rating, and can keep people from renting an apartment or contracting other services.
Until recently, senior citizens were required to pay 7% of their pension for health insurance; however, that is no longer the case.
Regarding children, they are allowed to remain covered on their parents´ plan beyond the age of 18 years, as long as they have a student status.
Difference between public and private insurance
- The most delineated difference between the plans is that Isapres offers access to the more exclusive private clinics, and is respectively also more expensive for its subscribers.
- Isapre performs health screenings prior to signing an insurance contract with applicants.
- Fonasa enrollment is automatic for all citizens and foreigners who are employed in Chile.
- For those that can affort private health insurance, satisfaction rates with the care providers is more than twice as high as with public sector patients.
- Many in the middle income class cannot afford to opt for the private scheme, as it requires additional contributions amounting to an average of 10% of their incomes (in totality). Public insurance coverage sets copayment rates based on income-means.
- Private plans do not cover the same range of services as the public insurer, and can employ cherry-picking practices in their benefit packages; e.g. they do not cover previously contracted conditions, apply risk-profiling, and often charge higher premiums of women and elderly subscribers.
The current healthcare insurance scheme with its public-private organizational split is provoking inequalities in care accesibility.
Public health insurance is funded through a universal income tax deduction of (minimum) 7% of every employee’s salary and supplemented by the government to cover the poor, and to fund public health programs.
Chile’s public national network of health services aims to provide universal coverage to all citizens.
Fonasa offers 4 types of plans based on the subscriber´s income:
- Plan A is free and is aimed at helping those in poverty.
- 35% of the population is entitled to this plan, and do not contribute to healthcare financing as they represent poor and financially vulnerable demographics.
- Plan B is for those who make less than the minimum wage.
- Plans C requires a 10% co-payment and a 7% salary tax.
- Plan D requires a 20% co-payment and a 7% salary tax.
Subscribers to Plans B, C and D can use private facilities at the charge of a copayment.
In an attempt to help families with the burden of healthcare, the decision was made for the states to pay for any catastrophic medical issues suffered by citizens.
There are 13 different private Isapres in Chile, though some are closed for subscription as they pertain to a particular sector or company, i.e. mining employees.
Isapres provide mainly curative services and target subscribers such as younger citizens and those with higher income.
In terms of affordability, only the top 20% of wage earners can afford to pay Isapres premiums. Private premiums can range from about €80 per month to €160 per month for a family.
Isapres prices can vary depending on the age and gender of patients, and on pre-existing conditions.
In cases where the patient’s 7% salary contribution is greater than the cost of the coverage, the excess funds can be used to pay for medical treatment that is usually not covered under the plan e.g. glasses or other co-payments.
Many companies offer complimentary health insurance to cover copayments as well as medication that might not be covered under the employee’s plan.
Private insurance- Employer Mutual
The Chilean Security Association, Chilean Construction Chamber and the Labor Security Institute are organizations that handle occupational illnesses and work-related injuries. They are referred to as the Employer Mutual.
Not only do they work on eliminating occupational health risks, they also insure the costs for medical and rehabilitative care when it is needed for employees within their respective group.
These Mutuals also have their own healthcare networks, i.e. hospitials, clinics and ambulatory care centers throughout Chile, to provide healthcare services to their beneficiaries.
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About Laura Weynants
Performs primary and secondary market research to create country reports at TforG. Interviews KOLs and medical sector professionals to build on TforG’s healthcare market expertise and competence networks. Complementing five years of sustainability policy and CSR communication, she now focuses on grasping key medical market trends, structures and opportunities in medical sectors worldwide. Coming from an international background of living in Germany, Spain, USA, UK and Belgium, she has gained a keen insight in international organizations and language skills to perform first hand investigations. She graduated from Sussex University Brighton, UK with a BA English Literature and Sociology and achieved a Master Degree in Sustainability and Corporate Social Responsibility in EOI Business School in Madrid, Spain.