Milei forces private medicine companies to lower prices

The outcry of Argentina's wealthy middle class against the increase in prices of private medicine has grown

in crescendo

until forcing President Javier Milei, a staunch supporter of free market regulation, to take action on the matter. This Wednesday, the Government reversed the freedom of prices authorized to the sector by the megadecree with which it began its mandate and issued a resolution that forces the main companies to reduce the value of their health plans: the maximum authorized increase is equivalent to inflation. The accumulated price variation between December and March, the latest official data, was 90%. Private medical plans skyrocketed by over 150% in the same period.

The blow to the pocket has been felt by all those who pay for these services, that is, around 14% of the Argentine population, just over six million people. However, the most affected have been the elderly, who have seen their income decrease due to the snip at pensions while their spending has skyrocketed due to the increase in health plans and medications. In extreme cases, faced with the impossibility of paying, some have turned to the courts and obtained favorable rulings. Others, despite themselves, have unsubscribed to join the health system that serves retirees and pensioners.

The Government began to issue increasingly serious warnings to prepaid medicine companies, as they are known in Argentina, but until today it did not decide to act because doing so contradicts the libertarian

leitmotif

that Milei defended in Davos: “The State is not the solution , it is the problem itself.” The presidential spokesman, Manuel Adorni, anticipated in a press conference that the Government would intervene to reduce prices. To justify the measure, he accused a group of companies “that represents about 75% of private medicine affiliates” of “cartelization.”

The official decision was known shortly after. Through a resolution, the Secretary of Industry and Commerce ordered the main private healthcare companies to “readjust the values ​​of the fees of their health plans according to the monthly variation of the Consumer Price Index.”

The Secretariat also ordered the companies to cease the exchange of information between them and to present to the National Competition Commission detailed documentation about each of their health plans such as prices, income obtained and number of members. As a result of a complaint filed with this body, an investigation has been opened for alleged cartelization “due to the coordinated increase in the prices of prepaid medicine plans.”

The National Competition Commission considers that agreements between competitors, commonly known as cartels, “constitute a serious infringement of competition legislation, which can lead to fines of up to 30% of the turnover of the offending companies.”

The companies investigated are Galeno Argentina SA, British Hospital of Buenos Aires Civil Association, German Hospital Civil Association, Medifé Civil Association, Swiss Medical SA, Omint SA de Servicios and OSDE Organization of Direct Business Services.

Medical

vouchers

The head of Swiss Medical, Claudio Belocopitt, harshly criticized the official decision, considering that prices are rising in line with the increase in costs in a country where year-on-year inflation is 288%, the highest in three decades. “Did we get out of hand, or did inflation get out of hand?” Belocopitt questioned in dialogue with the LN+ channel. The businessman admitted that health plans have become difficult to pay for part of the population. As a possible solution, he proposed that the Government subsidize users of private medicine, as well as provide

vouchers

to parents who take their children to private schools to help them pay the monthly fee: “Do the

vouchers

that are provided for education? What would be the difference of being able to deliver them for medicine as well? They could be done by talking, not seeking confrontation,” he asserted.

Belocopitt also rejected the accusations of cartelization launched by the Government and asked to look at the other sectors of the Argentine economy, in which he sees similar behavior regarding price increases. “In terms of fuel, if Shell goes up, within five minutes YPF does the same. A similar scenario occurs with milk. If we go to the tire industry, which has rubber as its main input, when it goes up and sees the increase in tires, it understands that the increase has similar bands,” he stated.

Milei has denied several times that there are market failures, but perhaps now, as the highest representative of the Argentine State, he is beginning to see them.