The National Regulatory Agency for Private Health Insurance and Plans
The National Regulatory Agency for Private Health Insurance and Plans (ANS) is the Agency established by the Brazilian Government under the Ministry of Health that operates nationwide to regulate, standardize, control and inspect the private health insurance and plans sector in Brazil. It was established by Act 9.961 in 2000, which defines its competence.
The regulatory framework for this sector consists of this law and Act 9.656 issued in 1998, which rules on the regulations controlling private health and insurance plans.
The ANS is a semi-autonomous government agency under a special regimen, characterized by administrative and financial autonomy, with its own assets and human resources management system, taking independent technical decisions and with directors appointed for fixed terms. Its institutional purpose is to protect the public interest in terms of private health insurance and plans, regulating insurers in this sector - including their relationships with providers and consumers - and contributing to the development of health related actions in Brazil. Headquartered in Rio de Janeiro State, it currently has twelve Regional Centers in Bahia, Ceará, Federal District, Mato Grosso, Minas Gerais, Pará, Paraná Pernambuco, Rio de Janeiro, Rio Grande do Sul and São Paulo States.
Market´s appearance and market expansion
From the 1950 onwards, the development of Brazil's industrial sector, particularly auto-assemblers, and the shift from an agrarian to an urban economy, with expanding hubs, influenced the organization of the services rendered by private health insurance and plans. Foreign executives, inspired mainly by experiences in the USA, organized medical and hospital care services with suppliers, specifically for their employees. The introduction of private medical and hospital insurance companies was also spurred by the capitalization of medicine, which strengthened the private sector for rendering health related services. Healthcare practitioners and service providers noted possibilities of offering access to heath related services to a portion of the population in industrialized urban areas that was formally linked to jobs in the processing, metallurgical and chemical industries. These factors underpinned the accreditation of private health insurance services helping expand the market, particularly group medicine firms and medical cooperatives. This expansion took place with no specific regulations addressing this type of health insurance.
Until the 1980s, private health insurances were focused on workers employed on the formal market. From the second half of the 1980s onwards, private health plan insurers expanded their businesses to include individual clients. In 1988, the Brazilian Constitution established the social right to health with universal access to healthcare and the establishment of a Unified Health System (SUS) (regulated by Act 8,080/90). The Brazilian Constitution makes no specific reference to the private health insurance and plans sector. At the end of this decade, significant growth in this market was accompanied by frequent complaints that became increasingly persistent, focused on failures to comply with contract rules. Within this context, the regulations controlling private health insurance rose higher on the agendas of society and the Government. The promulgation of the Consumer Protection Code Act (Act 8,078/90) strongly influenced events from the 1990s onwards, throughout the private health insurance market. The rights guaranteed by this Code underpin significant solutions to problems between beneficiaries and private health plan insurers.
Start of the regulations
During the early 1990s, discussions over private health insurances focused on the preparation of solvency rules for health plan insurers, opening up this sector to foreign capital, with calls to extend coverage and control prices as urged by medical and consumer protection entities. The demand for government regulations encompassed many aspects, represented by many different players and interests, with these discussions resulting in the approval of Act 9.656 in June 1998, ruling on private health insurances and plans. Until then, companies working with health insurances were subject to almost negligible government control, except for insurance companies, which were regulated by the Treasury Ministry through the Private Insurance Industry Regulator (SUSEP). The establishment of a Supplementary Health Insurance Department (DESAS) under the Ministry of Health in 1998, was the first step towards regulating the private health insurance and plans market.
Promulgated in 1998, the regulations laid down by Act 9.656 ushered in sweeping changes, especially: the obligation to provide ample coverage by healthcare services, including all pathologies included in the International Classification of Diseases (ICD-10), psychiatric care, kidney and cornea transplants, and a ban on time constraints and the number of hospital admissions and procedures. Additionally, rules were laid down for beneficiaries dismissed from their jobs, retirees and people with pre-existing conditions, portability, urgent and emergency care, and contract rescissions by the insurer. The regulations also introduced parameters ensuring the economic sustainability of the insurers (actuarial reserves and financial provisions). With regard to increases in the monthly fees, the regulations handle individual and collective plans differently: for the former, the index was defined by the ANS, while collective plans could be negotiated freely between the parties, subsequently merely notifying the ANS. This difference in the legislation takes into account the bargaining power held by companies, associations and trade unions (legal entities) when signing up for plans, due to the number of beneficiaries involved.
In Brazil, the heath insurance and plans sector consists of public and private plans. As shown by the National Household Sampling Survey conducted by the Brazilian Institute for Geography and Statistics (PNAD/IBGE) in 2008, public plans account for some 21% of plans. They are linked to employer institutions providing care to civil servants and members of the army forces, not subject to registration by the ANS.
On the other hand, private plans are those offered by commercial insurers and companies with self health insured plans regulated by the National Regulatory Agency for Private Health Insurance and Plans (ANS), constituting 79% of this sector.
In terms of the network of healthcare providers, it is possible to note overlaps between the public and private sectors linked to the insurers for rendering health services. These overlaps appear when comparing the universe of providers that work with Brazil's Unified Health System (SUS) and the universe of providers contracted by the insurers, particularly when considering the different groups of providers contracted by each insurer.
The preparation of policies for the private health insurance and plans sector has been handled with the participation of society through prior discussions of proposals with representatives of all social segments. Consequently, this sector gains in stability and forcibility.
It is important to note that Brazilian law does not impose any constraints on foreign capital in terms of corporate control of health insurance providers.