Instituto Brasileiro de Geografia e Estatística

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System of Consumer Price Indices

Technical Note 01/2005

Health Insurance

  1. Considering the different adjustment parameters for health insurance monthly fees, IBGE adopts the adjustment parameters in force, i.e. the lowest adjustment factor that allows for the continuous use of health services. The recent procedures, in alignment with the adopted methodology, are listed below.
  2. 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.
  3. 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. Annual adjustments are normally fixed by ANS in May to be valid for the following 12 months. The adjustment comes into force for users according to the renewal date of their health insurance policies. For example, if the application starts in June, all contracts will be adjusted in July of the following year.
  4. 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.
  5. Aware of the different adjustment percentages for new health insurance policies (after January 1 of 1999, regulated by Law 9 656/98) and old health insurance policies (previous to that law), IBGE analysts use a weighting factor in the calculations. According to the information of the Ministry of Finances obtained from ANS (as of June of 2005) a weighting of 58% is given to the new policies and 42% to the old ones.
  6. In 2004, a higher percentage adjustment would be applied to the old policies, in accordance with the “program of contract migration”. However, after judicial restraints and discussions, an agreement was reached and the same adjustment parameter was authorized for both new and old policies.
  7. In 2005, while a higher adjustment for the old contracts is being analyzed, the issuing of two invoices was authorized for the same month. One invoice with the current adjustment and another with the higher adjustment. Users may decide if they prefer to pay the adjustment in force or the higher one. This decision is given to consumers for reasons of safety. That is, it attempts to anticipate problems for consumers and the health insurance market in case there is a judicial decision favoring the higher adjustment.
  8. Thus, while there is no definitive decision, IBGE will not consider the higher option of payment, as the current monthly fees are based on the actual adjustment.
  9. Finally, although the Superior Court of Justice (STJ) decided to allow health insurance companies to adjust the prices of old contacts using a higher percentage yesterday (October 05), the definitive judgement did not occur.

Directorate of Surveys
October 06 of 2005