Bill of health

The cost of private healthcare in Mexico continues to rise rapidly.

The cost of healthcare in Mexico has risen sharply. Private insurance increased fourfold in 2021 and the Mexican Association of Insurance Institutions (“AMIS”) has warned that premiums are expected to register a further 16% increase in 2022.

The public health system in Mexico collapsed during the COVID-19 pandemic and is still suffering from a lack of infrastructure and shortages of medicines. Many middle-class Mexicans initially turned to private healthcare but are now being priced out as the cost of hospital treatments, medicines, medical fees and services continue to rise.

“Medicine shortages are expected to continue,” explained the medical director of a private hospital in Mexico City, “primarily due to poor public procurement processes. They [the government] are already late for 2022 so the shortages will continue at least until the middle of next year. The main problem is the huge bottleneck that is the Federal Commission for the Protection against Sanitary Risk (COFEPRIS). It is suffering from an inadequate budget, personnel problems and no operational capacity to grant authorisations for new drugs.”

“Medicine shortages are expected to continue, primarily due to poor public procurement processes.”

Medical director, private hospital, Mexico City

Mexico has been suffering medicine shortages since 2018 when the government took purchasing power away from the Ministry of Health and gave it to an inexperienced department within the Ministry of Finance. COVID hasn’t helped, of course, but the system was already broken.

All of the above has meant that insurance premiums are spiking. “The increase in prices of private medicine has been gradual but sustained,” explained an insurance company executive, “and this must be reflected in insurance premiums. Furthermore, the pandemic has resulted in a vast increase in claims for major medical expenses and, above all, the cost of hospitalisations has increased. I wish we could lower our prices but it’s not possible.”

“The increase in prices of private medicine has been gradual but sustained and this must be reflected in insurance premiums.”

Executive, insurance company, Mexico

However, the private premium prices in Mexico have been disproportionately rising since 2018, when costs increased by 12.9%. Increases in claims have also prompted insurance companies to change their risk methodology resulting in a significant increase in insurance premiums.

In January 2021, 26% of Mexico’s 126 million population did not have any form of health insurance, however, of the remaining 64% of the population, 33% admitted to using private health services in the past. A report published by AMIS in January 2021 showed that 560,000 Mexican households had suffered financial setbacks associated with private medical costs.

The insurance company executive confirmed, “The biggest impact is among the middle class. It is estimated that the pandemic has reduced the middle class in Mexico by 6.3 million people and one of the first things they cut is private medical care. Even those whose income hasn’t been affected are still looking to reduce coverage due to the rising cost of insurance – some 30% to 40% over the pandemic.”

The hospital director continued, “The root of the problem is that INSABI [the government agency that provides medical services to people without social security of private healthcare] is not ready to meet the excess demand.” Some stakeholders have been calling for INSABI to be restructured to cater for those expelled from the insurance market, but their pleas have fallen on deaf ears.

“It’s important to note that the price increases are not even, they are more noticeable in private hospital clinics and in hospitalisation, not so much in clinics,” said a hospital director. Worryingly, the situation is not expected to improve for the foreseeable future.

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