After Covid hit Brazil two years ago, over 2 million Brazilians acquired health insurance. This rush, which began in July 2020, has kept the number of customers close to record highs to this day. Now, as price spikes reach double-digit highs, will the bubble burst?
Perhaps surprisingly, the answer to this question hinges a lot more on the job market than on recent eye-watering price hikes defined by the government’s regulator for healthcare plans, ANS.
Last week, ANS approved the highest price adjustment in history for individual and family plans: a 15.5 percent spike. The increase is calculated by considering the costs insurers incurred in the previous year and inflation — but it is not the only price hike customers are subjected to, as prices also go up as they get older.
For the 8 million customers of individual or family healthcare plans, that is indeed bad news. But, from the corporate side, the impact will be quite restricted — and will therefore probably not offset the sector’s growth trends.
Understanding the rules
According to Brazilian legislation, individual and family plans are the only kinds of health insurance plans that must abide by price caps set by the regulator. For corporate plans, the negotiations happen between the insurer and the corporate customer, using an average of the costs as a benchmark.
Over time, insurers reduced their...
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