Instituto Brasileiro de Geografia e Estatística

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Sistema Nacional de Índices de Preços ao Consumidor

Technical Note 01/2004

Health Insurance

Due to the recent change in the system of adjustments for health insurance, IBGE will start to adopt, from the indices of July on, a specific weighting procedure to estimate the changes in monthly fees. The procedures and alterations, in coherence with the adopted methodology, are listed below.

1. In order to estimate the monthly fee changes of family and individual health insurance contracts for the purpose of calculating consumer price indices, IBGE takes into account, since 2001, the adjustment percentages applied to contracts signed in a period of one year or more, covering the majority of users.

2. The survey includes monthly visits to the most representative health insurance companies, those that notoriously attend the highest number of users. The rate of adjustment applied to the monthly fees, whose renewal takes place in the month of the survey, is provided by each company. The informed percentage is based, in general, on the adjustment fixed by the national Agency of Supplementary Health – ANS. Adjustments are normally fixed by ANS to be valid for the 12 months following the decision. The adjustment comes into force for users according to the renewal date of their health insurance policies. For example, if the application starts in July, all contracts will be adjusted in July of the following year.

3. In order to obtain the actual adjustment over contracts, a sample of companies is visited in each surveyed region. We will assume that, on average, 1/12 of the users have contracts with renewals in each month of the year, the monthly result incorporated in the indices is obtained from its adjustment plus the stability of the values of the other results. By the end of twelve months, the price indices of IBGE will reflect the total adjustments (in force) that occurr over the contracts in a 12-month period.

4. The problem is that in 2004 the adjustment index fixed by ANS, a base for the updating of the values applied by the companies, is not being applied as it was before. This time, the fixed base adjustment reached a specific group of users, those with contracts signed after January 1 of 1999.

5. In order to update the values of the individual and family contracts signed up to December 31 of 1998, in compliance with the decision of the Federal Superior Court (STF) of August of 2003, the companies can use what is stipulated by contracts, overruling Law 9 656/98, which regulates the sector of health insurance.

6. With that distinction, in order to estimate monthly fee changes, IBGE will start to use weighting factors in the calculations. The insurance policies previous to 1999 account for 58% of the total and those after 1999 account for 42%, according to data from ANS. Thus, the methodology used up to that moment is kept, but it starts to weight the adjustments applied to two different groups of users: (1) those that signed contracts up to December 31 of 1998 will be given a weight of 58%; (2) those that signed contracts afterwards, a weight of 42%.

Directorate of Surveys

July 15 of 2004