Health plan has a record number of elderly people and predicts a price increase – 07/21/2023 – Market

The crisis in the health plan market, which is going through a scenario of operating losses and high loss ratio, should deepen with the escalation of the presence of elderly people in the customer base. The price increase is treated by industry executives as one of the alternatives to help balance accounts.

The number of beneficiaries over 60 years of age jumped from 3.3 million in 2000 to 7.3 million this year, reaching the record for the age group in all types of health plan contracting, both individual and family plans as well as corporate collectives or membership, according to an analysis by the IESS (Institute of Supplementary Health Studies) based on data from the ANS (sector regulatory agency).

Today, the elderly represent about 14% of the total number of beneficiaries — and the presence grows through new adhesions by contractors who are already elderly, but also by the anniversary of the old beneficiaries who turned 60 years old.

The so-called supplementary health aging index, an indicator that compares the age groups at the ends of the population, was around 74% at the end of 2022, that is, today there are almost 74 elderly people for every 100 young people under 15 years old. According to the IESS, this is the highest level in the historical series that started two decades ago, when the index was below 50%.

High values ​​for this indicator indicate that the demographic transition is at an advanced stage, which could put pressure on the financial sustainability of health plans and the balance between revenues and expenses.

“There is no way to escape reality: with our aging, our expenses with health grow. This will invariably be reflected in the price”, says Marcos Novais, superintendent of Abramge (Brazilian Association of Health Plans).

FenaSaúde (a federation of operators) points to projections of a 47% growth in the number of users of health plans over 60 years of age by 2031, causing a 20% increase in the assistance expenses of operators in this decade. As a result, care for the elderly will consume 45% of total expenses, up from the current 35%.

José Cechin, superintendent of the IESS, assesses that, to resolve the bottleneck, it is not enough to raise prices, since the more expensive plans can scare away customers, including younger ones, who contribute to balancing the weight of the cost of the elderly. According to him, according to the sector’s rules, the way plans are priced allows seniors to pay a little less than the average cost for their age group because younger people pay a little more, contributing to solidarity between generations. In this way, the presence of young people helps balance the system.

“There is a limit to the elevation of the price curve. The increase tends to discourage young people from remaining in the plan. This is not a long-term solution. So, what is the solution? We don’t know it yet”, says Cechin.

The average per capita care expenditure of the elderly in operators in the self-management segment was BRL 10,000 in 2020, according to a report by FenaSaúde based on data from Unidas (an entity that brings together self-management institutions). In the range up to 18 years old, this average was R$ 1,400 in the year.

Cechin says that the cost of the elderly, on average, is higher than that of beneficiaries of other age groups because they tend to have more chronic diseases. He points out that the debate on the subject requires care not to give the wrong impression that the aging of the population is the main culprit for the imbalance.

“The situation is a little more complicated. The cost of health grows due to multiple factors. The incorporation of technology is the main one, worldwide, in the US, Japan and here”, he says.

Prices are already high and are among the main reasons for complaints by beneficiaries, according to consumer protection NGO Idec.

Currently, if a 77-year-old senior does a simulation to compare prices on the Qualicorp website, he will find options ranging from R$660 to almost R$7,000 per month. The plan commits a significant part of his income if he retires at the INSS average, with about R$ 1,700 per month.
In the cheapest options, with up to BRL 820, he only finds plans without a single room, without the right to reimbursement and without an accredited network —or with few hospitals (less than 20).

The presence of elders goes up in all types of plan. In the case of individual and family members, the readjustment cannot exceed the ceiling defined by the ANS each year. But the category of business collectives, which accumulated almost 34% growth in the number of elderly people in the decade, and collective membership (19%) are free to pass on price increases.

Idec has been looking for the ANS to present the growing complaints about prices received by consumer protection institutions and bring proposals to limit the increase in collective plans. The NGO also asks the regulatory agency to demand more transparency from operators in calculating the readjustment.

Marina Paullelli, Idec’s lawyer, says she is afraid of an impact on the consumer. “Financial arguments are always raised by operators as an obstacle to the continuity of health plans or a defense to make consumer rights more flexible. These arguments must be read carefully”, she says.