The benefits of Brazilian insurers increase despite the economic crisis and unemployment

Patients receive medical attention in an ambulance in front of the Asa Norte Hospital, in Brasilia.Andre Sousa Borges / EFE

The coronavirus pandemic has translated into more money for health insurance companies.

Not only do their balances continue to be positive, as in recent years, but they have seen their benefits increase during 2020, despite the economic crisis and rising unemployment, according to the results presented by the National Agency for Complementary Health (ANS). ) from Brazil.

Three experts consulted by EL PAÍS agree that the social isolation measures, recommended by the World Health Organization (WHO) and the medical community to stop the contagion curve of covid-19, made people cancel their check-ups, non-essential medical consultations and surgeries.

In short, people stayed home to protect themselves, which led to a decline in demand for private health services.

Consequently, insurers have spent less money to meet these costs.

Only by analyzing the medical-hospital sector, the ANS finds that medical insurance companies obtained, approximately, an accumulated net profit of 15,000 million reais [about 2,900 million dollars] during the first three quarters of 2020. 66% more than during the same period of 2019, when they reaped 9 billion reais [about $ 1.74 billion] in profits.

And 150% higher than the first three quarters of 2018, when the accumulated net result in the first nine months of that year amounted to 6,000 million reais [slightly more than 1,160 million dollars].

Considering only the second quarter of 2020 - April, May and June, one of the most affected by the health crisis - companies recorded profits of 9 billion reais [about 1.74 billion dollars during those months.

Triple compared to the same period in 2019, a year in which its earnings reached 3 billion reais [$ 580 million] in the second quarter alone.

Furthermore, by the end of the first half of 2020 they had already reached 11 billion reais [2.13 billion reais] in profits.

The result is almost identical to that of all of 2019, the year they closed with profits of 12,000 million reais [about 2,320 million dollars].

“It is one of the few sectors of the economy that has done well this year.

Insurers have come out bigger, stronger.

They have taken advantage of the pandemic and the lack of inspection and regulation, ”argues Mario Scheffer, professor at the Department of Preventive Medicine at the University of São Paulo (USP).

Likewise, the doctor highlights that delinquency remained close to historical rates, between 7% and 10%.

"Because it is a matter of added health need, it is the last thing that families and companies stop paying."

Vera Valente, executive director of the National Federation of Supplementary Health of Brazil (FenaSaúde), an entity that represents 16 groups of health insurance companies, affirms that "the accounting data available to date covers only a part of the financial year 2020" and that "any conclusion from them is partial, incomplete and premature."

For its part, the Brazilian Health Insurance Association (ABRAMGE), which brings together 700 insurers, sent a statement stating that "the actual figures for the current year will not be known until the balance sheets are disclosed in 2021."

More time at home, less expenses

These results are due, above all, to the low accident rates, which measures the ratio between income and expenses of companies, at the peak of the pandemic, according to the ANS.

During the first quarter of 2020, the index averaged 77%, a figure close to the results recorded in the first months of 2019 and 2018. During the second quarter, however, it fell to 64%, far from 84 % of the same period of 2019. “The demand for private services has decreased a lot during the pandemic.

The so-called elective procedures and even emergency services decreased, because people chose to stay at home, ”explains Matheus Falcão, a health analyst at the Brazilian Institute for Consumer Defense (IDEC).

The explanation of the sector follows the same line.

“On the recommendation of the health authorities of the country and the world, the frequency of elective medical procedures has decreased as a way to help fight the pandemic.

(...) Naturally, due to the decrease in frequency, expenses have also fallen, which has been reflected in the results until September ”, explains Valente, from FenaSaúde.

She says that the accident rate "has already returned to 75% in October" and is expected to "reach 80% until the end of the year," a sign that beneficiaries are beginning to demand private health services again.

"Consequently, the trend in healthcare costs is clearly upward," he adds.

Postponed uploads

For Lígia Bahia, doctor in Public Health and professor at the Federal University of Rio de Janeiro, the decrease in the accident rate does not by itself explain the very positive results of the medical insurance companies.

Remember that companies continued to raise the prices of monthly installments until September.

"[The increase in insurance companies' profits] is a confluence of these two variables," explains the professor.

The ANS, under pressure, froze the new increases between September and December - except in certain contracts, such as business groups of 30 people or more.

Furthermore, this measure does not affect contracts renewed during the pandemic before September.

“It has been necessary, but it is incomplete.

It should have included the whole year and business insurance ”, explains Falcão, an analyst at IDEC.

The analyst also recalls that the readjustments will be authorized next year and the insurers will be able to replace what they stopped receiving during the freezing period, albeit in a fractional manner.

With which, in practice, there has been no freeze, but a postponement of collection.

"It is as if companies and individuals are owing money to insurers," explains Bahia.

“The 2020 results are very positive and the sustainability of the insurers is highly guaranteed.

Your income has not been compromised.

In this way, it would be interesting to discuss and formulate a more advantageous proposal [for the insured] ”, explains Falcão.

Lack of input

In the opinion of some of the experts, insurers have stopped increasing their contributions to public health during the pandemic.

"Insurers are not responsible for even 10% of the tests carried out in Brazil, even considering the PCR, incorporated from the beginning in the list of procedures," argues Falcão, from Idec.

The ANS determined that PCR tests, which detect the presence of the virus, will be included in the list of mandatory procedures in March.

Serological tests, which identify the presence of antibodies, were not included until August.

To pay for the tests, insurers require a medical application and the person has to present symptoms of covid-19 for a certain time.

“According to the PNAD survey, the tests reached 12% of the population, but 25% have health insurance.

Why didn't the companies do the tests? ”Asks Bahia.

“They chose to pretend nothing was wrong.

It is negligence ”, he criticizes.

It is also criticized what concerns the loan of beds to the public health system, according to specialists.

According to the ANS, the average bed occupancy rate (conventional and ICU) in the private sector was 64% between March and October.

In relation to beds exclusively for Covid-19 patients, the average occupancy was 54% during the same period, reaching 60% at the peak of the pandemic.

By then, several municipal and state hospitals were in collapse, while the public power struggled to increase the number of beds.

"Health insurance companies refused, in a moment of collapse, to offer their beds, to sell them to the public health system," recalls Scheffer.

Scheffer says that the complementary healthcare lobby works so that the sector is increasingly deregulated, so that companies can increase monthly fees while making coverage more flexible with the offer of so-called “popular insurance”.

In that sense, Bahia points out, there are changes that have come to stay, such as the idea of ​​comprehensive healthcare based on telemedicine.

Valente, from FenaSaúde, points in the same direction: “One of the lessons of the pandemic so far is that it has become clear that more integrated assistance can be offered, bringing public and private systems closer together to increase access to health, and telemedicine is a good example of this ”, he explains.

"The pandemic has also reinforced that there are other paths beyond the hospital-centric model, the need for more basic care actions and greater prevention, with care focused on people's health and not on the disease."

Expansion and new businesses

According to the ANS, a total of 47.2 million Brazilians enjoy some type of private health insurance, and almost 40 million are collective.

These types of contracts can be freely renegotiated, contrary to the individual ones, in which the ANS establishes the readjustment.

The economic difficulties in the country caused the total number of beneficiaries to begin to fall from 2014, but the figure remained practically stable throughout 2020. With the increase in unemployment during the pandemic, insurers lost just over 300,000 users between March and June - a decline of less than 1%, unable to seriously affect health insurance revenues, according to Scheffer.

But they are recovering in the second semester and will close the year with a growth in the number of users.

"Until October, the increase is 0.4% in the medical-hospital branch," explains Valente.

Scheffer says that this combination of declining demand for medical services and rising prices has given insurers the liquidity to make new acquisitions and investments.

There is no report on such operations, but he explains that it is a time of "business consolidation and expansion" of the largest companies.

This translates into purchases by smaller companies and groups in the interior regions of the country and the purchase of hospital chains.

"There has been a greater concentration of the market and a territorial expansion of the large insurers," says the professor from USP.