Key data

Most of the growth in Brazil's health insurance sector has been attributable to the improvement in the buying power of the population at large, as well as the crumbling state of the public health system.

However, 74% of the public still receive health care primarily through the public health system, while only 3% of overall health care is from health insurance, with the rest coming from co-operatives, self-insurance and HMO’s.

Health insurance and private health provision has been a controversial area in Brazil for some time mainly because of alleged abusive pricing by insurers and HMOs. In 1998, specific legislation was passed aimed at curbing abuses, and to improve public confidence in private health care.  The legislation is still undergoing amendment in 2000..

Under the current regulations, five basic categories of plans were established in law:

• Outpatient,
• Hospitalization with obstetrics (childbirth),
• Hospitalization without the childbirth option,
• Dental, and
• Reference (comprehensive).

Insurers and HMOs can offer products that fall within the scope of one or more of these categories.  The regulations set out minimum product specifications and rules of behavior for insurers and HMOs.

The new regulations have increased confidence somewhat in private health care, and are likely to boost demand for health insurance products. They also level the playing field between health insurance and health plan providers, by requiring the latter to gradually set up reserves for their operations. Previously HMOs did not have to set up specific reserves to cover their health operations.

However, insurers are concerned that the regulations will reduce their flexibility and their freedom to set prices as they see fit.

The prospect of introducing managed care is also attracting a number of foreigners. Firms such as Cigna (USA) have entered the Brazilian health sector by buying into local firms. Insurers are also likely to take up reinsurance of health portfolios to a greater degree than before – and this will become more relevant as the Brazilian reinsurance monopoly comes to an end, as is planned.

The corporate sector accounts for a large proportion of demand for health insurance. This is because many companies provide health insurance as a standard benefit for employees.

Insurers differentiate by price, as well as by product features. Firms are also differentiating by aiming at various different income groups. A number of firms, for example, now offer the option of treatment outside Brazil.

The health insurance sector is dominated by Sul America, Bradesco, and Excel Cigna.