The IESS demands from the State the payment of USD 5,012 million for health care for retirees and people with catastrophic illnesses.
One of the commitments that the Government acquired as part of the new credit program with the International Monetary Fund (IMF) is to pay the millionaire health debt of the State with the Ecuadorian Social Security Institute (IESS) for:
The Government must fulfill this and other commitments as part of the credit for USD 4,000 million, which it expects to receive until 2028 from the multilateral organization.
This is a debt that has accumulated since 2001 and that as of March 2024, already amounts to USD 5,012 million, according to the debt bulletin of the Ministry of Finance, which includes these liabilities with social security.
That could help cover almost half of the IESS Budget in 2024, which was approved at USD 10,223 million. The IESS includes in this figure care in its own health centers, but also from private health providers. Only in May 2022, during the Government of Guillermo Lasso, did the State recognize that there is a debt to pay for this health care.
Hence, the Ministry of Finance and the IESS reached an agreement to carry out an audit to identify the real amount of outstanding obligations. This audit was carried out as part of the previous program with the IMF that was underway at that time, as it was also a goal to receive money from the multilateral organization.
Thus, during the Lasso Government, debts from the periods 2013 to 2016 and from 2020 to 2021 were audited, according to an IMF report. The former Minister of Finance, Pablo Arosemena, assures that in the Lasso Government, USD 232.9 million were audited and paid for these health debts.
Of that amount, USD 201.59 million corresponded to payments for debts for retiree care between 2013 and 2016. And another USD 31.3 million for retiree care that occurred in the last quarter of 2021.
How will the State catch up with the IESS?
According to the credit program with the IMF, the Noboa Government will have to do the same as Lasso did during 2022; that is, resuming the audits to advance with payments. Noboa committed to “establish a mechanism to resolve IESS medical care claims, to give predictability to the audit process and compensation of verified obligations,” the agreement says. To do this, the Ministry of Finance will have to establish an agreement with the IESS for the settlement and payment of these obligations, both with internal and external health providers. The Noboa Government will have until October 2024 to establish this new agreement to catch up with the IESS.
With this new agreement, the Ministry of Finance will have to hire, through a competition, an auditing company. This audit will be to identify the amount of debts for health care for the periods 2023 and 2024.
This agreement with the IESS must also define the process to follow to audit and settle the 2022 health obligations, according to the IMF. That goal must be met until the end of December 2024.
The debt continues to grow
During the previous credit program with the IMF, the Lasso Government also presented to the multilateral an action plan and strategy with deadlines to undertake legal reforms and administrative actions in the IESS.
The plan was focused on “strengthening the legal framework for the State’s obligations regarding health expenses and audits” and was scheduled to be implemented in 2023. With that, according to the Lasso Government, the State’s obligations with the IESS ” If there were any, they would be reported, recorded and settled in a timely and transparent manner.
However, in May 2023, with the declaration of cross death, Lasso did not complete his term. The legal reforms to solve this problem with the IESS, which has been in place for 23 years, were also left on standby. Hence, the State’s debt with the IESS for health care continued to increase.
The lawyer specializing in social security, Patricia Borja, explains that the State’s debts for health care with the IESS harm the sustainability of the system, since the entity has been forced to use savings or disinvest resources. In the 2024 budget, the IESS forecast income of USD 1,540 million in the health fund, but its health expenses are projected at USD 2,039 million.
“Every year, the IESS asks the State for a certain amount for health care, but the State still does not allocate the money; in the IESS Budget that box is always empty,” says Borja. In fact, in 2024, the State did not budget resources to pay its ongoing obligations for IESS health care for retirees and members with catastrophic illnesses.
The most serious thing is that there continues to be a lack of clarity and decision regarding how payment for the care of people with catastrophic illnesses, which demand high expenses from the IESS, should be covered, says Borja. The problem surrounding the coverage of care for catastrophic illnesses originates from the fact that the Social Security Law of 2001 establishes that they be covered with resources from a solidarity fund in which affiliates, employers and the State contribute. For this, a regulation was required that established the percentages of contributions of each member, says Borja.
But later, in 2008, the Constitution established that these care for catastrophic illnesses be covered with tax revenues from the State, adds Borja. Borja explains that, despite the fact that the Constitution is above the 2001 Law, the Ministry of Finance has insisted that this tripartite solidarity fund must be created. Hence, the IESS has even filed actions before the Constitutional Court, so that what the Constitution provides is fulfilled and the State covers these services directly, he adds.
By: PRIMICIAS