The Extension of Healthcare (Chercar Versión en Español)

The extension of healthcare
coverage and protection

in relation to the labour market:
Problems and policies
in Latin America
Carmelo Mesa-Lago
Distinguished Service Professor Emeritus of Economics,

University of Pittsburgh, United States
In the past 25 years almost all 20 countries of Latin America

have reformed their healthcare systems, but coverage by social
insurance averages 53 per cent of the total population (less
than the ILO minimum standard), ranges from 7 to 26 per
cent in ten countries and has stagnated or decreased in at 3
least eight, and access is insufficient. This article (1) analyses
the transformation of the labour market and its impact on
social insurance coverage; describes legal coverage of various
groups; estimates statistical coverage/access and its trends
in the three typical sectors (public, social insurance and
private); documents the differences in coverage by income,
geographical area and ethnic group; examines the difficulties
in the incorporation of the informal economy, the rural
population, indigenous peoples and the poor, as well as
the causes of low coverage, and touches problems of access;
(2) summarizes recommendations from international
organizations on coverage and access; suggests specific
policies to expand protection in general and to vulnerable
groups, and identifies themes that require more statistics
and research; and (3) summarizes findings and
recommendations.
A preliminary version of this article was presented at the ISSA Regional Conference for the
Americas held in Belize City, 28-31 May 2006. Based on the author’s book Las Reformas de Salud
en América Latina y el Caribe: Su Impacto en los Principios de la Seguridad Social (Santiago,
ECLAC/GTZ, 2006), the article summarizes and restructures all pertinent sections of that book,
with numerous changes and new data. Useful comments were provided by two anonymous
referees.
© 2007 The author(s) Journal compilation © 2007 International Social Security Association International Social Security Review, Vol. 60, 1/2007
Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
Healthcare coverage and protection in relation to the labour market: Problems and policies in Latin America
T he majority of countries in Latin America have three health sectors: pub-

lic (generally under the charge of the ministry of health), social insur-
ance (several entities in some countries) and private (various types, both
for-profit and not-for-profit). Two countries only have two health sectors
(Brazil, public and private; and Chile, public-social insurance and private)
and only Cuba has one sector, public. This article distinguishes between
coverage by or affiliation to the health programme of social insurance (the
central theme) or private plans, and access to healthcare by the uninsured
population through the public sector or other means such as private not-
for-profit entities and out-of-pocket expenses. In the past quarter century,
and particularly the past 15 years, virtually all 20 countries in the region
reformed their healthcare systems, albeit with considerable differences
in their models, scope, depth and speed (see Londoño and Frenk, 1997;
Mesa-Lago, 2006). Despite those reforms, social insurance coverage of the
total population averages 53 per cent (below the ILO minimum standard),
ranges from 7 to 26 per cent in ten countries and has stagnated or declined
in at least eight of them, while general healthcare access is insufficient in
half of the countries.
4 This article is divided in two parts. The first examines the transformation
of the labour market and its impact on social insurance health coverage in
the region; describes the type of legal coverage of various groups; estimates
the statistical coverage/access and its trends in the three typical health sec-
tors; documents differences in coverage by income, geographical area and
ethnic group; analyses the difficulties in incorporating groups working in
the informal economy and rural, indigenous and poor populations; briefly
touches on access to services; and identifies the causes of the low coverage.
The second part summarizes the approaches of international and regional
organizations to coverage and access; in addition, it proposes policies to ex-
pand protection in general and among vulnerable groups and identifies
themes that require statistics and/or further research. For comparative ana-
lysis of the 20 countries they are divided into three groups based on the time
of inception and degree of development of their social security systems, as
well as demographic variables: (1) pioneer-high (Argentina, Brazil, Chile,
Costa Rica, Cuba and Uruguay); (2) intermediate (Bolivia, Colombia, Ecua-
dor, Mexico, Panama, Peru and Venezuela); and (3) latecomer-low (the Do-
minican Republic, El Salvador, Guatemala, Haiti, Honduras, Nicaragua
and Paraguay).1
1. Albeit with some exceptions in the characteristics, the pioneer-high group was the first to
establish social insurance in the region (in the 1920s and 1930s): its systems have virtual uni-
versal coverage, are the most developed, and endure high expenditures and usually financial
and actuarial disequilibria, and its populations are the most aged with the highest life expec-
International Social Security Review, Vol. 60, 1/2007 © 2007 The author(s) Journal compilation © 2007 International Social Security Association
Analysis of healthcare coverage and its problems
Composition of and transformation

in the labour market: Impact on coverage
Since the 1980s the urban formal labour sector has diminished in Latin
America while the informal economy has grown, thus creating a formidable
challenge to social insurance not only to expand its coverage but even to
maintain current levels, because most informal workers either are excluded
or have very poor cover. The informal economy involves unskilled work-
people with low productivity, such as self-employed workers, domestic
servants and employees in microenterprises. The informal sector in the re-
gion augmented from 43 to 47 per cent of urban employment in 1990-2002,
owing to the reduction in formal public employment, the growth of em-
ployment in large enterprises at a slower pace than the increase in the la-
bour force, the expansion of jobs in microenterprises, domestic service and
self-employment, and the increase in labour “flexibilization”, i.e. subcon-
tracting, part-time work or jobs without contract, all of which lack social
protection (ILO, 2003). 5
The informal sector’s share of the employed urban labour force averages
47 per cent and ranges from 29 to 43 per cent in Chile, Costa Rica, Panama,
Argentina, Brazil and Uruguay (countries of the pioneer-high group plus
one in the intermediate group), and 50 to 63 per cent in Ecuador, Guate-
mala, Paraguay, Venezuela, Honduras, Nicaragua, Peru and Bolivia (coun-
tries of the latecomer-low group except for four in the intermediate group)
(Table 1). Self-employment, the largest segment of the informal sector, aver-
ages 31 per cent of the employed labour force and ranges from 20 to 26 per
cent in Chile, Costa Rica, Uruguay, Panama, Mexico, Argentina and Brazil
(the pioneer-high group except for two in the intermediate group) and from
34 to 46 per cent in Guatemala, Ecuador, Venezuela, Nicaragua, the Domin-
ican Republic, Honduras, Peru, Colombia and Bolivia (the latecomer-low
and intermediate groups). Coverage of the self-employed workforce is very
difficult because of the lack of an employer, unstable and low-paid jobs, the
obligation to pay a contribution equal to the combined percentages charged
tancy. The intermediate group introduced social security in the 1940s and 1950s, has a medium
level of coverage and development of its systems, lower costs and a better financial situation
than the first group, although some in this group suffer disequilibria, and its demographic
variables rank between the two groups. The latecomer-low group was the last to implement
social security in the 1960s and 1970s: its systems are the least developed and have the lowest
coverage, but enjoy a better financial and actuarial situation than the other two groups, and its
populations are the youngest but with the lowest life expectancy (Mesa-Lago, 2006).
Table 1. Population groups difficult to cover by social insurance, Latin America,

2001 to 2003 (%)
Country Informal/Urban Self-employed/ Self-employed Poverty/Total
labour forcea employed labour unpaid/Rural population
force labour forceb
Argentina 38.4 23.9 45.4c
Bolivia 62.8 46.5 86.0 62.4
Brazil 42.1 26.2 63.8 37.5
Chile 28.7 20.3 33.3 18.8
Colombia 44.4 41.1 54.8 51.1
Costa Rica 32.7 20.6 29.0 20.3
Dominican Republic 45.5 35.0 53.6 44.9
Ecuador 50.4 34.2 54.3 49.0c
El Salvador 49.2 31.3 50.3 48.9
Guatemala 51.6 33.9 58.4 60.2
Honduras 54.3 37.5 63.0 77.3
6 Mexico 42.9 23.0 44.3 39.4
Nicaragua 55.5 34.9 57.2 69.3
Panama 34.8 21.9 57.9 34.0
Paraguay 53.8 32.0 69.4 61.0
Peru 58.2 40.3 74.0 54.8
Uruguay 42.7 20.6 15.4c
Venezuela 53.9 34.4 44.9 48.6
Regional averaged 46.8 31.3 55.9 44.0
Notes: Empty spaces denote lack of data. There are no statistics on Cuba and Haiti.
a Percentage of the urban labour force employed that is either unskilled or self-employed or domestic servant
or employed in microenterprises, all with low productivity.
b Percentage of the rural labour force that is self-employed or unpaid family worker.
c Only urban.
d Non-weighted except poverty incidence.
Source: Mesa-Lago, 2006.
to waged workers and their employers, and the difficulties in enrolling and
collecting from them. Domestic servants represent from 4 to 10 per cent of
the labour force in 13 countries, a smaller proportion than that of self-
employed workers. We lack statistics on the percentage of employees in
microenterprises because the large majority of them are informal and it is
very hard and expensive to detect and monitor them; for these reasons, so-
cial insurance usually gives priority to enrolment in and collection from
large and middle-sized enterprises, neglecting the small ones. Home, sea-
sonal and part-time workers, as well as those lacking a labour contract
and unpaid family workers, are as tough to detect and affiliate as the self-
employed population.
Contrary to the urban informal sector, the rural share of the total labour
force has diminished in the region, but still fluctuates between 29 and 55 per
cent in the latecomer-low group. Furthermore, self-employed and unpaid
family workers average 56 per cent of the rural labour force and range from
44 to 86 per cent in all countries except Costa Rica and Chile (29 and 33 per
cent respectively). This segment is also very taxing to cover because the
majority are peasants, seasonal workers, self-employed, sharecroppers or
squatters, all normally occupied in subsistence agriculture; they either lack
an employer or have one only for a few months in the year and their in-
come is meagre; and their dispersion makes service provision very difficult.
Finally, poverty incidence in the region averages 44 per cent and ranges
from 15 to 38 per cent in the pioneer-high group (45 per cent in Argentina
owing to the crisis) and from 39 to 77 per cent in the rest (except for 34 per 7
cent in Panama). It is highest in the latecomer-low group, and the poor are
excluded in most countries (Table 1).
The ILO (2003) has developed a methodology to determine the level of
social protection in the Latin American labour market, based on household
surveys taken between 1992 and 2002 in seven countries: two in the pio-
neer-high group (Argentina and Chile), three in the intermediate group
(Bolivia, Ecuador and Peru) and two in the latecomer-low group (Guate-
mala and Nicaragua). Diverse levels of social protection were estimated
according to the degree of vulnerability that was set by the labour status of
the worker typified by three variables: employment status (employer, em-
ployee, self-employed, unpaid worker, unemployed), type of enterprise or
sector (large, small, public) and skill level (professional, non-professional).
Based on this classification, seven groups were identified and ordered in
terms of social protection (from high to low) as follows: four groups are of
low vulnerability and high social protection (employer, employee in large
enterprise, employee in public sector, self-employed professional) and
three groups are of high vulnerability and low social protection (employee
in small enterprise including domestic servant, unskilled self-employed,
unpaid worker, unemployed). The elaboration of statistics on healthcare
coverage by social insurance was obstructed because survey questions were
not always standardized (Gasparini and Bertranou, 2005; see estimates of
coverage below).
8
International Social Security Review, Vol. 60, 1/2007
Table 2. Legal mandatory coverage of social insurance health scheme by type of occupation,
dependent family of the insured person, and pensioners, Latin America, 2005-06
Country Employees Self-employed Domestic Agriculturea Dependent family Pensionersd
servants
All Part Sp o u s e b Childrenc
Argentina X f X X X X X
Bolivia X f X X X
Brazil X X X X X X X
© 2007 The author(s)
Chile X f X X X X X
Colombia X X X ? X X X
Costa Rica X f X X X X X
Cu b a X X X X X X X
Journal compilation © 2007 International Social Security Association
Dominican Republic X f X X X
Ec u a d o r Xe f Xe X X X X
El Salvador X X X X
Guatemala X X X X
Haiti X
Honduras X f X X X
Mexico X f f X X X X
Nicaragua X f Xe X X X
P a n a ma X f X X X X X
© 2007 The author(s)
Paraguay X f X X X X
Peru Xe f Xe X X X X
Uruguay X f X X X X X
Journal compilation © 2007 International Social Security Association
Venezuela X f X X X X
Notes: Empty spaces denote lack of legal coverage (exclusion). In Cuba coverage is not by social insurance but by the public sector exclusively; in Brazil it is by the public sector
and in Chile by a combination of social insurance and the public sector; in Haiti social health insurance has not been fully implemented; in Guatemala and Honduras not all departments
are covered.
a Usually excludes peasants and other independents; there are schemes for peasants in the social insurance schemes of Ecuador and Mexico; in Peru an agrarian insurance scheme
covers both waged and independent workers.
b Only in maternity in El Salvador, Guatemala, Honduras and the Dominican Republic; only in sickness in Ecuador.
c Only lower than ages 1 in Ecuador and the Dominican Republic, 5 in Guatemala, 11 in Honduras and 12 in El Salvador and Nicaragua.
d Only old-age pensioners in Nicaragua; only pensioners whose income is less than the maximum annually set in Uruguay.
e The mandatory coverage of all employees or domestic servants is not implemented in practice; Paraguay only covers domestic servants living in the capital city.
f Voluntary affiliation, hardly effective; in Argentina also for small entrepreneurs who pay taxes (monotributistas); in Costa Rica the law stipulates mandatory coverage in 2006; in Colombia
covered in the contributory regime for those who earn more than two minimum wages, the rest covered in the subsidized regime; in Nicaragua, Panama and Venezuela legal drafts make it
mandatory; in the Dominican Republic and Paraguay, mandatory by law but has not been implemented; in Uruguay some self-employed have voluntary affiliation while others are covered
in the public sector.
Source: Mesa-Lago, 2006.
International Social Security Review, Vol. 60, 1/2007
9
Legal coverage
In virtually all countries in the region, political constitutions and laws of

social security or healthcare establish the right to healthcare cover and/or
access, usually universal and free for the uninsured. And yet, in about half
of the countries that mandate it, this is not in effect. Table 2 exhibits the com-
pulsory coverage of social insurance stipulated by the law (it also explains
when it is voluntary, and identifies laws in process to make it compulsory)
in the following six groups: employees in the formal sector (distinguishing
when all or only part of them are legally covered); self-employed workers
and domestic servants in the urban informal sector; the rural-agricultural
sector; immediate family economically dependent on the insured person
(spouse and children); and pensioners.
In the six countries of the pioneer-high group, all employees have man-
datory legal cover (including domestic servants and agricultural workers);
this is also true with few exceptions in five countries of the intermediate
group (Colombia, Mexico, Panama, Peru and Venezuela); in Ecuador cover-
age of domestic servants is not enforced, and Bolivia excludes both domes-
10 tic and agricultural workers. Conversely, all countries of the latecomer-low
group compulsorily cover only some employees (Haiti virtually lacks social
insurance), because either the insurance is not operative in all regions of the
country or it excludes domestic and agricultural workers legally or in prac-
tice. Self-employed workers have mandatory legal cover in only three coun-
tries (Brazil, Colombia and Cuba; in Paraguay the law is not enforced), are
excluded in three countries (El Salvador, Guatemala and Haiti) and have
voluntary cover in the 13 remaining countries. Recent laws (not yet imple-
mented in most countries) or legal drafts make cover compulsory for the
self-employed workforce in Costa Rica, the Dominican Republic, Nicara-
gua, Panama and Venezuela.
Domestic servants have mandatory cover in 13 countries (although in
three of them it is hardly effective), have voluntary cover in one and are ex-
cluded in six. These workers have an employer but many of them lack a la-
bour contract and, when it does exist, it is difficult to demand the employer
contribution or the wage is very low and the worker collaborates with the
employer to evade affiliation. Agricultural workers are excluded in half of
the countries; the other half covers mainly wage earners in large plantations
and members of cooperatives in some countries. Self-employed peasants,
sharecroppers, squatters and the like are excluded, with three important ex-
ceptions: the peasant schemes of the principal social insurance institute in
Ecuador (Seguro Social Campesino) and Mexico (the Mexican Social Security
Institute’s IMSS-Oportunidades programme), and the agrarian insurance in
Peru that covers self-employed rural workers. The spouse (usually woman)
and children who are economically dependent on the insured person are
compulsorily covered in all countries (except Haiti) but with important
restrictions in the latecomer-low group: the female spouse is covered for
maternity but not sickness (in El Salvador, Guatemala, Honduras and the
Dominican Republic, while the opposite occurs in Ecuador), and these five
countries and Nicaragua exclude children above ages ranging from 1 to 12.
Pensioners are covered in all countries albeit with limitations in two. Un-
paid family workers, employees of microenterprises, and home, seasonal
and part-time workers, as well as those without a labour contract, are either
excluded from social insurance cover or covered only optionally or under
certain conditions in a few countries. In most countries the law determines
the minimum number of employees in an enterprise (usually between five
and ten) required for mandatory affiliation.
Health reforms have extended legal coverage in only five countries:
Brazil, Colombia, Cuba, the Dominican Republic (the reform is only partly
in force) and Nicaragua. Only a few reforms set a target for population cov-
erage; in Colombia the goal of 100 per cent coverage in 2001 has not been
met yet. 11
In most countries the public sector (habitually the ministry of health)
should protect the population that lacks resources and social insurance or
private coverage, but in practice part of that population often do not have
effective access. The private sector includes three types of providers. Most
common are profit seekers such as prepaid medicine, insurance and inde-
pendent providers (hospitals, clinics, personnel) that normally take care of
the upper-middle and high-income population mainly in urban areas, but
also the low-income population without effective access to the public sector
who pay out-of-pocket expenses at great sacrifice and with regressive dis-
tribution effects. The not-for-profit providers are NGOs, churches, charities,
foundations, etc. that care for the poor and low-income population. Finally,
traditional medicine, which commonly charges for services, is important in
at least six countries of the Andean and Central American regions and cares
for the poor and especially the indigenous population.
Estimates of statistical coverage

and trends
Table 3 exhibits estimates of the percentage of the total population covered

by healthcare in 19 countries, indicating the year of the data and the dis-
tribution between the three sectors (public, social insurance — main pro-
gramme, and private), as well as in the category “others” (separate social in-
surance schemes existing in many countries for civil servants, armed forces,
oil workers, teachers, etc.). A fundamental difficulty in the calculation of
“total coverage” is that it combines coverage by insurance (social or private)
with access to the public sector that might be effective or not. Estimates are
based mainly on statistics provided by institutions and on household sur-
veys from a few countries, but their accuracy is considerably reduced be-
cause of the following problems:
• there are no historical series of statistical coverage in the region, Cuba
does not publish statistics on access in the public sector (there is neither so-
cial or private insurance), and only gross estimates are available (incom-
plete in some countries) for Bolivia, the Dominican Republic, Ecuador,
Haiti, Peru and Venezuela;
• there are no estimates available on the effective access to the public sector
in five countries;
• it is impossible or very difficult to estimate coverage by the private sector
in five countries and the category “others” in seven countries;
• there is an overestimation due to double coverage in social insurance
and/or total coverage/access in four countries;
12 • data on total coverage and that of the uninsured population are unreli-
able in three countries;
• estimates are from five to eleven years old in eight countries and are
available for 2003-04 in only six countries;
• there are significant contradictions among divergent estimates in some
countries, sometimes in the same source or document;
• surveys commonly lack standardized criteria to categorize the popula-
tion protected by the three sectors and “others” (for details and analysis, see
Mesa-Lago, 2006).
Taking the above caveats into account, Tables 1 and 3 suggest that the
older the social security system and the larger the formal sector, the higher
the population coverage by social insurance, and vice versa. The countries
with the highest total coverage between 2000 and 2004 (86 to 100 per cent)
were five in the pioneer-high group, and probably access to the public sec-
tor in Cuba, although statistics are not published. The two most advanced
countries in the intermediate group also appear to have universal coverage
(Mexico and Panama, but in the former 42 per cent of the population is not
covered by social insurance and with uncertain access to the public sector);
in Colombia coverage could either be 100 or 53 per cent depending on
whether the population that still is supposedly covered by public hospitals
(vinculada) is included or excluded from the estimates; in Bolivia, Ecuador
and Peru total coverage decreases to 61-71 per cent. In the latecomer-low
group, coverage is 57-68 per cent in five countries (El Salvador, Haiti, Para-
Table 3. Healthcare coverage of the total population by the three sectors,

Latin America, 1985 to 2004
Country Years Percentage distribution of the total population
Public Social Private Others Total
insurance
Argentina 1991 36.4 57.6 4.6 1.4 100.0
2001 37.4 54.4 7.9 0.3 100.0
Bolivia 1997 30.0 25.8 10.5 0.0 66.3
Brazil 1998 75.5 24.5 100.0
2003 75.5 24.5 100.0
Chile 1984 83.4 3.1 14.0 86.1
2002 67.5 18.5 100.0
Colombia 1993 50.0 23.7 73.6
2002 46.7 53.3 100.0
Costa Rica 1994 0.0 86.2 13.8 100.0
2003 0.0 86.8 13.2 100.0
Dominican Republic 2000 60.0 7.0 12.0 5.0 84.0
Ecuador 1994 28.0 18.0 20.0 7.0 73.0
2004 41.6 16.5 1.7 1.0 60.8 13
El Salvador 2001 40.0 15.8 1.5 57.3
Guatemala 1995 30.0 16.6 12.0 58.6
2000 26.0 16.6 30.0 72.6
Haiti 2000 21.0 38.0 1.0 60.0
Honduras 2000 52.0 11.7 1.5 65.2
Mexico 1985 47.7 41.8 10.5 100.0
2002 41.8 45.3 12.9 100.0
Nicaragua 1990 18.3
2001 60.0 7.9 0.5 68.4
Panama 1996 39.9 61.1 0.0 100.0
2004 35.4 64.6 0.0 100.0
Paraguay 1999 42.0 12.4 6.3 1.2 62.0
2001 33.3 12.4
Peru 2002 30.0 26.0 12.0 3.0 71.0
Uruguay 1987 27.2 15.8 30.8 13.9 87.7
2000 38.7 15.9 34.7 7.9 97.2
Venezuela 2000 38.4
2004 38.3
Notes: Empty spaces denote lack of data. There are no statistics on Cuba although officially 100 per cent are covered
by the public sector. Chile combines social insurance and the public sector; in Costa Rica the public sector facilities were
transferred to social insurance.
Source: Mesa-Lago, 2006; see analysis on the reliability of data in each country.
guay, Honduras and Nicaragua) while in the other two it is higher (72 and
84 per cent in Guatemala and the Dominican Republic respectively, though
both are doubtful figures).
As has been noted, it is impossible to have a reliable estimate of total cov-
erage (three sectors and “others”) because of uncertain effective access to
the public sector and lack of data on “other” programmes in seven coun-
tries. Even less feasible is to contrast coverage before and after reform, for
the same reasons and because comparable figures are only available for half
of the countries and even then not always for the year prior to the reform.
Changes in affiliation among sectors before and after the reform (Colombia)
or considerable multiplicity of social insurance schemes prior to the reform
(Chile) also obstruct the comparison. It is viable, however, to estimate a re-
gional average (weighted by the population of each country) of social insur-
ance coverage relative to the total population before and after the reform.
Such coverage increased from 61 per cent in 1980 to 64 per cent in 1990 and
declined to 53 per cent in 2000-04 (248 million insured); subtracting Brazil,
which accounts for almost half of the total insured in the region, the average
decreased to 41 per cent in 2000-04 (compared with 43 per cent in 1980 and
14 52 per cent in 1990). All of these averages are below the ILO minimum
standard of 75 per cent coverage of the resident population, but an undeter-
mined part of the population is protected by the public sector and to a lesser
extent by the private sector and “others”. Roughly 59 million people, or
11.5 per cent of the total population, were covered by the private sector in
2000-04.
Trends in coverage/access by sector and country can only be detected in
a limited number of countries: public sector access is the most uncertain
(eight countries) and appears to have fallen in five countries, increased in
two and stagnated in one; social insurance coverage — the most certain —
including its combination with the public sector in Chile (12 countries) was
stagnant in five countries, declined in four and increased in three; and cov-
erage in the private sector — relatively uncertain (six countries) — seemed
to have risen in four countries (where coverage by public and social insur-
ance contracted) and to be stagnant in two. Although data are needed from
more countries, as well as of better quality in most, the above figures sug-
gest a fall in public sector access, stagnation or decline in social insurance
coverage, and an increase in private sector coverage.
According to household surveys (ILO, 2003), healthcare coverage of the
labour force in 2000-02 was 56 per cent in Argentina and 87 per cent in
Chile (pioneer-high group); 15, 24 and 33 per cent respectively in Bolivia,
Peru and Ecuador (intermediate group); and 17 per cent in Nicaragua and
26 per cent in Guatemala (latecomer-low group). It is possible to detect
changes in coverage between two points in time (1994-98 and 2000-02) in six
countries: a decrease in three (Argentina, Bolivia and Peru) and an increase
in three (Chile, Ecuador and Nicaragua).
Differences in coverage by income level,

geographical area and ethnicity
Statistics of 12 countries on the population covered by social insurance by in-

come quintiles in 1996-2002 demonstrate that coverage increases with in-
come and vice versa. Furthermore, in four countries (Argentina, Brazil,
Chile and the Dominican Republic), the trend is accentuated in private sec-
tor coverage; Brazilian data indicate an equally positive relationship be-
tween the level of schooling and use of private services, and Chilean figures
show that private sector coverage declines as age rises while public sector
coverage increases. Although data from other countries are needed, the
above figures question the capacity of the private sector to extend coverage
among the lowest-income, worst-educated and oldest segments of the pop-
ulation because of adverse risk selection practised by providers. The com-
parison of impact of reform on coverage is possible in two countries only: 15
in Colombia it increased significantly in all quintiles in 1993-97, but de-
creased across the board by 2000, though still at a higher level than in 1993;
in Bolivia coverage fell in all quintiles in 1996-2000.
According to data on differences in coverage mainly by social insurance,
available in 12 countries, the extreme ratios between the best- and worst-
covered geographical areas were virtually nil or very small in Costa Rica,
Cuba and Uruguay, 1.2 times in Brazil (basic package in the public sector),
1.4 in Argentina and Chile (public-social insurance), 2 in Colombia, 5 in
Panama, 38 in Paraguay, 107 in Ecuador, 350 in Honduras and 400 in Nica-
ragua (inequality is lowest in the pioneer-high group and highest in the
latecomer-low group). The best-covered geographical areas are the most
developed, urban and wealthy, while the worst-covered or not covered at
all are the least developed, rural and poor (the segmentation of the health-
care system in more than half of the countries, without adequate coordina-
tion, contributes to that situation). Comparative data on the impact of the
reforms on such differences were available only for Colombia: the extreme
ratio between the best- and worst-covered department decreased from 2.8
to 2 times in 1993-2003, while the ratio of urban-rural inequality declined
from 4.4 to 1.3 times. Nevertheless, there was an increment in the in-
equalities between urban and rural capitals, and the basic package in the
subsidized regime that covers poor and low-income people is half of the
package in the contributory regime. In those countries that have a consider-
able indigenous population it is concentrated in the poorest, most rural

and worst-covered areas, but there are no figures on specific coverage by
ethnic group.
Coverage of groups difficult to incorporate
Coverage of the self-employed population is often given as a proportion of to-

tal affiliates in the main social insurance programme; for instance, 0.4 per
cent in Nicaragua, 1 per cent in Honduras and Mexico, 2 per cent in Peru,
4 per cent in Colombia, 5 per cent in Ecuador and 6 per cent in Argentina.
All these countries have legal voluntary coverage except Colombia but its
goal of incorporating 80 per cent of the self-employed workforce in 2000
(with the aid of a solidarity contribution) was not met; in Argentina only the
tiny entrepreneurs who pay taxes are compulsorily covered (monotribu-
tistas) by social insurance; the rest are protected by the public sector. In
Brazil care for self-employed persons is legally mandatory in the public sec-
tor and, because there is virtual universal coverage, they should be covered.
Similarly, in Cuba all the population officially has access to the public sec-
16 tor, including those who are self-employed. In Chile coverage is optional
and only 1.7 per cent of the total insured population in the private sector are
self-employed; however, all indigent self-employed people are eligible for
free care in the public-social insurance sector. Costa Rica also has voluntary
coverage but 45 per cent of the self-employed population are affiliated to
social insurance because the State provides a subsidy (in lieu of the em-
ployer’s contribution) to those with low income. In Uruguay 45 per cent of
the self-employed workforce are covered in the public sector, 28 per cent by
not-for-profit mutual-aid entities and 5 per cent by the private sector and
others. The ILO (2003) has estimated voluntary coverage of unskilled self-
employed workers by social insurance in 2000-02 as follows: 3 per cent in
Nicaragua, 4 per cent in Guatemala, 7 per cent in Bolivia, 12 per cent in Peru,
17 per cent in Ecuador, 36 per cent in Argentina and 74 per cent in Chile —
virtually all in the public-social insurance sector.2 It is difficult to make in-
ferences on the effects of compulsion on actual protection of the self-em-
ployed workforce, because only three countries have legal mandatory cov-
erage and only in two of them does it seem to be effective; and yet all
self-employed workers are covered in those two countries while only 3 to
36 per cent (with one exception) are covered in countries where coverage is
2. The very low coverage in countries with high percentages of self-employed workers
(Bolivia, Ecuador, Guatemala, Nicaragua and Peru) and the lack of data on coverage in the
Dominican Republic and Honduras are indicators of the grave lack of protection of the self-
employed population.
optional. The immense majority of these workers only have presumptive

access to the public sector.
The legal compulsory coverage of domestic servants in 13 countries does
not appear to be effective, as the scarce data available indicate: 3 per cent
in Paraguay, 11 per cent in Panama, 13 per cent in Ecuador, 27 per cent in
Colombia and 31 per cent in Uruguay. Half of the countries legally exclude
agricultural workers, which explains why there are very few figures on
their coverage: 1.5 per cent in Ecuador (but 18 per cent of the rural popula-
tion are covered by peasant insurance), 2 per cent in Honduras and 3-6 per
cent in Mexico (but 28 per cent of the rural population are covered by peas-
ant insurance). Coverage of employees in microenterprises in 2000-02 was
5 per cent in Nicaragua, 7 per cent in Bolivia, 12 per cent in Guatemala and
Peru, 20 per cent in Ecuador, 42 per cent in Argentina and 88 per cent in
Chile (ILO, 2003).
Access and utilization
Recent surveys on general healthcare access (in the three sectors) from
17 countries, though quite diverse, show that 4 to 62 per cent of the popula- 17
tion who were sick did not seek healthcare; the percentage was lower in the
pioneer-high group and higher in the latecomer-low group (the lowest in
Uruguay and the highest in the Dominican Republic). The most frequent
reasons given for not seeking medical care in seven countries were lack of
money; too distant facility or long waiting list; self-medication; sickness
perceived as being minor; absent or deficient or too expensive care; low con-
fidence in staff; lack of medicines or physicians or an appointment; exces-
sively complex procedures; and no information. Of those who sought care,
the majority went to the public sector but 32 to 54 per cent had to resort to
the private sector in five countries of the latecomer-low group, because of
lack of access to the public sector; the lowest proportion sought care at a so-
cial insurance facility, and 40-48 per cent used traditional medicine in two
countries.
Access in rural areas is considerably more restricted than in urban areas
and the capital city; access for those with resources is immediate but it takes
a long wait for those who lack resources; there is a high correlation between
income and use of services; and access by dependent family members of the
insured person is significantly lower than directly by insured people them-
selves (often owing to restrictions imposed on spouses and children). Ac-
cess to social insurance by the indigenous population is worse than for the
rest of the population in four countries, at half the rate of the non-indige-
nous population; 30 to 90 per cent of indigenous persons use traditional
medicine or self-medication, while 54 per cent lack potable water at home

and 79 per cent a septic tank. In five countries the basic healthcare package
has been a key factor in facilitating and extending access, but encounters
some serious problems: one-third of the population lacks access; geograph-
ical and ethnic barriers persist; the first level of care has improved but refer-
rals and counter-referrals are deficient; family doctors lack basic medica-
tion; etc.
Causes of the low coverage and non-fulfilment

of goals
The low coverage in half of the countries — the seven in the latecomer-low
group and three in the intermediate group (Bolivia, Ecuador and Peru) — is
due to factors external to the system but also the system itself. External fac-
tors are underdevelopment, high poverty incidence, large informal econ-
omy, high unemployment and underemployment, political instability or
crisis, lack of government commitment, illiteracy, different languages, eth-
nic and gender inequality, large rural population, regions poorly devel-
18 oped, scarce fiscal resources, and poor taxing capacity. The healthcare sys-
tem itself, rather than being neutral, can determine the degree of exclusion;
for instance, a segmented or highly segmented system without coordina-
tion and with weak regulation and poor solidarity is typical in all of these
countries. In the latecomer-low group, social insurance was introduced late;
in some countries coverage has not expanded yet to all geographical areas,
and several have large rural and indigenous populations difficult to incor-
porate. In addition, mechanisms for allocating and distributing financial re-
sources have played a crucial, negative role in coverage. Examples are the
higher expenditures of the social insurance and private sectors relative to
the public sector that is responsible for protecting the majority of the popu-
lation but has grossly insufficient resources, and the significant out-of-
pocket expenditures that burden low-income groups; the absent or inad-
equate regulation of these problems aggravates the situation.
Conversely, in countries of the pioneer-high group, social insurance was
developed early, and the system was better coordinated or integrated and
infused elements of solidarity. Healthcare systems with different organiza-
tion and financing in this group have achieved virtual universal coverage, for
instance: dual, mainly public, financed by ad hoc taxes and fiscal transfers,
combined with private supplementary plans (Brazil); dual public-social insur-
ance and private, financed by contributions and fiscal transfers (Chile); unified
social insurance financed by tripartite contributions and fiscal transfers to pro-
tect the poor, with minor private provision (Costa Rica); totally public, unified,
and financed by the state budget (Cuba); tripartite with provision partly by so-
cial insurance and partly by not-for-profit mutual-aid societies or private coop-
eratives, financed by contributions, fiscal transfers and co-payments or pre-
miums (Uruguay). These countries also have external positive factors that
have facilitated coverage, like relatively high level of development, large
formal sector, low poverty incidence and illiteracy, relative political stabil-
ity and government commitment to extension, and absence of significant
indigenous population in most of them.
Factors that impeded the 2001 target of universal coverage in Colombia
being met were lack of political consensus; economic recession and high
unemployment partly caused by the civil war; insufficient public health
expenditures; inability to shift supply subsidies to demand subsidies; post-
ponement of the start of the subsidized regime for the poor and low-income
population and delay and cut in funds designed for it; inadequate informa-
tion system to identify the poor population eligible to receive subsidies; re-
sources initially assigned to the poor shifted to salaries of medical person-
nel; and contributive regime increasingly exclusive owing to restrictions
and afflicted by growing evasion, payment delays and underdeclaration of
wages. 19
Policies to extend healthcare coverage
The need to develop reliable statistics on coverage
In view of the fundamental void when it comes to accurate total coverage

figures, it is crucial that all international and regional organizations en-
gaged on healthcare join efforts in a coordinated manner to develop unified,
standardized and reliable statistical series on population coverage/access,
disaggregated by the three sectors and with pertinent information on all us-
ers (in social insurance on the direct insured population and dependent rel-
atives). The ISSA (2003) conducted a study with estimates of coverage in
15 countries in the world, including Costa Rica, Mexico and Uruguay. The
ILO (2001) has undertaken 20 studies of coverage (including various coun-
tries in Latin America) and the International Labour Conference of 2001
gave maximum priority to the extension of coverage and compilation of sta-
tistics. For that purpose various mechanisms should be established in social
insurance, the ministry and other key healthcare institutions: a modern
integrated information system, a unified registry with all insured/users
(workers and dependent family) and their characteristics, periodically re-
vised and updated — both deconcentrated to collect the data in all contact
points with affiliates/users — and a single identity card for all insured per-
sons/users containing basic information. It is surprising that half of the

countries in the region generate standardized statistics on coverage regard-
ing private pensions, published biannually by a regional association, but
that such data are not available for the private healthcare sector, not even
rough estimates of the number of insured people and users, something that
should be mandatory for the information system and to develop better con-
trol and supervision of their services. Last but not least, household surveys
in the region should include standardized questions to identify those who
are excluded (uninsured, without access) and their economic, social and
health characteristics, essential to design policies of extension, estimate
their costs and set priorities.
Approaches of international and regional organizations

to reaching universal coverage
Several international and regional organizations have conducted analyses

of the current situation that coincide with a number of the issues docu-
mented in this article, and propose various general approaches to extend
20 coverage and access, with some consensus on certain key points.
The ISSA undertook an “Initiative” in 2000-05 that emphasized the study
of social security coverage and its extension, and encouraged a debate
among experts, administrators, scholars, policymakers and the public
(ISSA, 2005). The conclusion was that coverage is either stagnant or declin-
ing, particularly in developing countries, because the formal sector has
shrunk while the informal economy, subsistence agriculture and migratory
labour have expanded, under conditions that are increasingly precarious;
these workers either have no income or an uncertain and irregular one,
making it impossible for them to contribute to social security. The current
contributive model hence proves inadequate and many countries have not
designed their systems to extend coverage to the excluded workers. And yet
there are valuable experiences: thus, a developing country, Costa Rica, ac-
complished wide healthcare coverage in 20 years and universal coverage
in 50 years, faster than many European countries. The ISSA offers a new
approach to cope with these problems in the twenty-first century:
• universal and inclusive coverage should be a priority for all nations;
• governments must assume responsibility for guaranteeing the right of
protection to the population, enacting adequate and transparent legislation
that includes a regulatory framework for the private system to function cor-
rectly, making political and financial commitments with continuity through
future administrations, and properly inform the people of their social
security rights and corresponding financial costs;
• social security institutions must take the lead in extending coverage and
guaranteeing the compliance of those covered, for which they should be
efficiently managed, adapt themselves to existing labour market condi-
tions, and develop two levels of social security coverage: the current con-
tributory one for formal waged workers, and another of subsistence for the
rest of the labour force (directly or in cooperation with the State) with the
ultimate goal that the latter be gradually incorporated into the former;
• those institutions must continue financing the contributive regime with
wage contributions but ensure compliance and fight evasion, receiving the
needed legal authority and proper human and financial resources.
This is a challenge that ISSA members can and must tackle (ISSA, 2005).
The ILO recommends three complementary forms of protection: social
insurance and assistance as the conventional tools, and promotion of inde-
pendent decentralized programmes, based in local or community initia-
tives, and self-financed and self-managed (especially microinsurance);
and the design of mechanisms to connect all forms of social protection. In
middle-income developing countries (those in the pioneer-high group and
the most advanced in the intermediate group in Latin America) the State
and social insurance play a central role, although the insurance must be 21
adapted to incorporate groups of workers such as those who are self-
employed, and grant subsidies to protect low-income groups that are unin-
sured. In low-income countries (those in the latecomer-low group and the
least advanced in the intermediate group), the capacity of the State and
social insurance to extend coverage is limited; the insurance must be re-
structured to improve the protection of the insured population, but decen-
tralized mechanisms have the greatest potential. The ILO and the Pan-
American Health Organization (PAHO) have signed an agreement for a
regional initiative to support member countries in their efforts to extend
healthcare protection to excluded groups and guarantee universal access
to services independent of the capacity of people to pay (Reynaud, 2002;
ILO, 2001; van Ginneken, 2003).
PAHO (2002) advises healthcare authorities to guarantee universal basic
protection to all the population, regardless of economic means, in order to
reduce inequalities in access to needed health services with adequate qual-
ity, and for that purpose effective coverage should be provided to excluded
groups, especially those in the informal economy and the marginalized
population. PAHO recommends five strategies practised in the region,
sometimes in combination, whose advantages and limitations are summa-
rized below, with some successful examples added by the author.
• Non-contributory social insurance (social assistance) for the poor and
low-income groups, which could be successful in the short run but lacks
financial sustainability in the long run because it is often financed with tem-
porary external funds, is not properly integrated into the general health
system and offers unequal care. One successful example is Costa Rica’s
non-contributory healthcare programme for the poor, financed with fiscal
transfers and integrated into the unified social insurance programme,
which does not discriminate in its treatment of those insured in the contrib-
utory programme and has been in operation for more than 30 years.
• Voluntary insurance with fiscal subsidies for some population groups,
which functions while the government continues its support: it can provide
care albeit at an inferior level to that in the general system. Fiscal subsidies
granted by the Costa Rican State to self-employed workers, which increase
as income decreases, have been successful in expanding voluntary affilia-
tion in social insurance to almost half of these workers, do not discriminate
and have functioned for many years.
• Community programmes administered by users in areas afflicted by
significant exclusion and where conventional insurance has not been suc-
cessful, whose advantages are the capacity to adapt to local needs and be
self-managed, but this requires proper coordination with public services,
22 diverse and sustainable sources of financing, and managerial capacity.
• Public system open to all the population, usually combined with a sup-
plementary private programme, with diverse financial sources (including
wage contributions and taxes); its principal limitation is the lack of guaran-
teed access to higher levels of care. Brazil’s public system is a good example
of the mix of public and private-supplementary, and Chile’s of the mix of
public-social insurance and alternative private; Cuba’s public system is
open to all the population but without a private component.
• Expansion of specific services to some population groups, a feasible ap-
proach in the short run but restricted by its poor sustainability. In any case it
is essential, says PAHO, to shift the emphasis towards health promotion
and primary care, guaranteeing continuity of attention among levels of care
and sectors, and strengthening the demand of the population that is at
higher risk of exclusion.
The World Bank (1993), in its first worldwide report on healthcare, rec-
ommended a combination of diverse means of protection to facilitate uni-
versal coverage: social insurance, private insurance and providers, and the
State in a subsidiary fashion. The government should target available pub-
lic funds in an efficient manner for the protection of the poor and other vul-
nerable groups (through the basic package), and promote a friendly envi-
ronment for the development of mechanisms of private protection that
should facilitate expansion of coverage. A new report by the World Bank,
specific to healthcare in the region, warns that while the current focus on
covering the formal salaried sector through public or quasi-public risk-

pooling mechanisms (social insurance) persists, it will be very difficult to
ensure effective coverage beyond a comparatively well-off minority. To
change that situation the Bank proposes various policies, some ratifying
the initial approach and others new: give priority to the extension of risk-
pooling to the large and growing informal sector, inventing contribution
means for households that are “non-poor” (i.e. whose contribution capacity
is above the average cost of the basic package) so that they participate in
risk-pooling mechanisms not linked to the workplace or labour status; dis-
connect risk-pooling financing from labour status, replacing wage contribu-
tions with general tax revenue; expand the participation of the private sec-
tor in the delivery of publicly financed health services as well as in contribu-
tory risk-pooling under an effective regulatory framework; define a univer-
sal explicit right to a benefits package of specified insurable contingencies;
and better target fiscal subsidies at public health goods (such as vaccina-
tions) granted to the poor, older people and other disadvantaged groups
(Baeza and Packard, 2006).
The Inter-American Development Bank (IADB, 2004), in its health strat-
egy for the region, sets as priorities the inclusion of the poor, lowest-income 23
groups and others excluded, such as indigenous peoples and communities
neither ethnically nor culturally integrated and discriminated against by
gender, as well as the reduction of inequities in coverage and quality be-
tween low- and high-income groups. To achieve such objectives the IADB
promises to intensify its efforts to improve coverage in public health pro-
grammes, such as health, epidemiological and environmental supervision,
promotion, prevention of contagious and chronic non-contagious diseases,
extension of supply of potable water, basic sanitation and collection and
disposal of solid residues, and help in case of natural disasters. In addition it
will attempt to protect the funds allocated to prioritized health programmes
in periods of fiscal restriction and macroeconomic adjustment.
The Economic Commission for Latin America and the Caribbean
(ECLAC, 2006), in a report on social protection recently published, recom-
mends the expansion of systems to insure mandatory universal coverage,
independent of work status, contributory capacity and risk level, to avoid
the need to disburse out-of-pocket expenses becoming an obstacle to access.
To that effect, insurance cover should be determined specifically by defin-
ing packages of explicit guarantees that constitute a universal right for the
entire population (as in Chile). Other suggested measures are strengthen-
ing the public sector; expanding primary care; adequately coordinating ser-
vices; and integrating financing sources to guarantee equity and solidarity
in the health system and compensate for gaps among regions.
It would be ideal that all these international and regional organizations

cooperate in identifying common policy approaches to extend coverage, as
well as discuss divergent approaches with the ultimate target of designing
and financing joint programmes, eliminating duplications and financing re-
search on unresolved problems and issues. In the above summary a consen-
sus can be noted among most organizations, all of them giving priority to
extension of coverage and the majority to the following policies: the need to
target fiscal subsidies on the poor and low-income population; the intro-
duction of a universal package of explicit benefits guaranteed to all the pop-
ulation regardless of insurance sector, labour status, income and risk; and
the extension of prevention and primary care. The agreement between the
ILO and PAHO is an example to follow.
Specific recommendations to extend coverage

in these countries
The six countries of the pioneer-high group, as well as Mexico and Panama
in the intermediate group, appear to have universal coverage, but it is diffi-
24 cult to evaluate this because we do not know the extent of effective access to
the public sector, particularly important in Mexico; in the other countries at
least 27-43 per cent of the population lack coverage and an indeterminate
proportion lack access. Governments in the region should give priority to
the universalization of coverage, and the trade unions, associations of peas-
ants, women and other social groups should put pressure on the govern-
ment and political parties so that they take the needed action.
For all countries in the latecomer-low group and the least advanced
in the intermediate group the following measures are recommended to ex-
tend coverage. In five countries where the insured person’s spouse is en-
titled only to maternity care via social insurance she should also be en-
titled to sickness coverage, and where she is only covered for sickness
she should also be covered for maternity; in equal manner, the male spouse
dependent on a female insured person should be covered for sickness
care. The six countries that restrict social insurance coverage by age to de-
pendent children (from 1 to 12 years old) should extend that coverage to
18 years of age. In Nicaragua all pensioners should be covered for the same
benefits as active insured persons (instead of a mini-basic package only
granted to part of them), and to finance that benefit a contribution could be
charged to the pensioners as is already done in ten countries of the region.
Financial-actuarial studies should be undertaken to estimate the cost of
these additional benefits and make potential adjustments in the contri-
bution.
The segmentation of the health system in more than half of the countries
contributes to low coverage and duplication of efforts and scarce resources
that should be employed in extending coverage; hence, the integration or at
least high coordination of those systems is essential, particularly in coun-
tries with multiple services at the federal, state and municipal levels. The
separate social insurance health schemes or those with their own health
facilities for influential groups (“others” in Table 3), which cover upper-
middle- and high-income insured persons, receive costly fiscal subsidies
that absorb scarce public funds, and have regressive effects on distribution,
should be integrated into the general social insurance programme or be-
come totally financed by those insured, eliminating all fiscal subsidies that
must be used for the extension of coverage. Furthermore, fiscal subsidies
also granted to some general social insurance programmes in the region
that have very low and stagnant coverage (basically concentrated on a
middle-income minority) should also be shifted to expand coverage of
low-income workers, matching their contributions as an incentive for affi-
liation.
Incorporation of difficult groups 25
Social security in the region has not adapted to the transformation of the la-
bour market in the past quarter century and must do so, because the process
probably will continue and adversely affect coverage. Healthcare reforms,
regardless of their model, should have as a first priority the universal cover-
age/access of the population, confronting the obstacles to incorporating dif-
ficult groups such as self-employed workers, domestic servants, employees
of microenterprises and other informal groups, as well as rural-agricultural
workers and the indigenous peoples. With some notable and laudable ex-
ceptions, the rigidity of social insurance institutions in the region has im-
peded the incorporation of those groups, an attitude that should change. A
well-conceived plan should be drafted by the government (for instance by
the ministry of health and social insurance jointly) with an open public de-
bate, participation from relevant social actors, support from a feasibility
study and a timetable for the gradual implementation of the extension. Such
a plan should be flexible about ways of incorporation, as well as contribu-
tions and benefits (ensuring the basic package), adjusting them to the con-
tributory capacity and needs of these workers and providing incentives
for affiliation. For instance, weekly or quarterly payments (instead of only
monthly); an option to join the social insurance branch of preference (par-
ticularly healthcare) instead of forcing affiliation in all branches at once;
voluntary insurance with alternative plans adjusted to the payment ability
of the workers and their families; deduction of contributions from taxes (in
Chile they are deductible for employees but not for self-employed workers);
and other incentives to encourage formalization. Mandatory coverage of
the self-employed population should be considered also; it exists in three
countries and is stipulated in laws or legal drafts in five others, and these
should be enforced. Statutory compulsory coverage might help but would
not solve the problem by itself; hence the need to consider a state subsidy (as
in Costa Rica) or a solidarity contribution (as in Colombia) geared to low-
income workers, especially those who lack an employer, to stimulate
their affiliation and reduce the proportion of the population that lacks in-
surance and seeks care in the public sector or pays out-of-pocket for private
services.
Coverage of domestic servants is legally mandatory in 13 countries but
data show it is low in most of them because inspection and enforcement are
difficult and there is the additional risk of dismissal of the worker who de-
nounces the employer for non-compliance. Hence the need for a campaign
of dissemination of information on the rights of domestic servants, com-
bined with strict job security for those who report the evasion, and fiscal
26 incentives for those who have low incomes, i.e. the majority.
To help in the incorporation of peasants and other excluded agricultural
workers, it is advisable to conduct a comparative study of the peasant pro-
grammes in Ecuador and Mexico. The former does not target the poor pop-
ulation but is based on feasibility and the degree of organization of the com-
munity, and financed by solidarity contributions paid by workers and em-
ployers in the general programme; the latter relies on criteria of poverty and
isolation and is totally state-financed. A comparative evaluation of the im-
pact of the two programmes on coverage and health indicators, as well as
identification of their progress and problems, would be useful to assess
their potential replication elsewhere.
In the process of incorporation of these groups, the State and/or social
insurance should promote and support associations, trade unions or coop-
eratives of self-employed workers, domestic servants, peasants, etc., which
could be placed in charge of the affiliation and collection of contributions
from their members; if this approach is not successful then either social in-
surance or the government should create a public scheme with similar func-
tions and adequate representation, financed with solidarity contributions
and fiscal subsidies. Where social insurance is incapable of extending cover-
age to the self-employed and similar groups, particularly in latecomer-low
countries, the public sector should be strengthened to protect them as is
done already in several countries (Brazil, Chile, Cuba and Uruguay). Previ-
ously suggested policies to extend coverage should be supported by finan-
cial and actuarial studies and identification of new sources of financing to

avoid generation of fiscal deficit; nevertheless, some countries in the late-
comer-low group have sufficient tax capacity to extend coverage; for
instance, in El Salvador the tax burden was 10 per cent in 2003, the lowest in
Central America.
Reduction of differences in geographical

and indigenous coverage
The significant differences in coverage in geographical areas, particularly in

countries of the latecomer-low group and at least two in the intermediate
group, require a plan to reduce them with proper targeting and finan-
cing. Seven countries have compensation funds (Argentina, Bolivia, Brazil,
Chile, Colombia, Mexico and Uruguay) that should be an example for other
countries, but only two of those funds compensate for inequalities between
geographical areas. Several countries have gradually extended the cover-
age of social insurance to all geographical areas (for instance Mexico, al-
though gaps subsist between the best and worst covered), but in others
(Guatemala, Honduras) parts of such areas or regions lack coverage or it 27
is very low. It would be very difficult in these cases for social insurance
to accomplish that task by itself; hence, it is advisable to join forces with
the public sector as in Chile. The experience of Colombia, which in just a
few years was able to reduce such differences, should be emulated but
it needs sustained effort and funds, combined with a campaign of informa-
tion in the poorest areas. The protection of the indigenous population also
requires targeting in the regions and areas where they live, particularly
through the expansion of the basic package and fiscal subsidies; the incor-
poration of personnel from the community and effective elements of tradi-
tional medicine is essential, as has been done in Ecuador and Mexico. In
Chile, 74 per cent of that population is covered by the public-social insur-
ance sector: 47 per cent of them are indigent and so exempted from contri-
butions.
Improvement in access
Household surveys show that in various countries (mostly in the late-

comer-low and intermediate groups) a high percentage of the population
that becomes sick does not seek healthcare, owing to lack of resources, defi-
ciencies in services or geographical, ethnic or cultural barriers, and a signi-
ficant proportion are also forced to pay out-of-pocket for private services,
owing to lack of access to public or social insurance services. The poor, rural
areas and indigenous zones endure the worst access. The basic package is
an instrument that has facilitated access at least to the first level of care, and
it should be granted by the three sectors and be universal regardless of place
of residence, income and risk. In the poorest countries that have a large pop-
ulation without access and scarce resources, however, priority in granting
the package should be given to those disadvantaged groups and areas,
allocating the needed fiscal resources.
Conclusions
Social health insurance has been in operation as long as 80 years in some

pioneer countries in Latin America, and has accomplished notable progress
in the coverage of a significant part of the population. The impossibility of
reliably calculating current total protection has been demonstrated, but
only 53 per cent of the total population were covered by social insurance
in 2000-04 (below the ILO minimum standard of 75 per cent) and such cov-
erage has stagnated or declined in eight countries in relation to 1990; also,
a decrease in access to the public sector has occurred but with an increase
28 in private insurance (although it covers only 11.5 per cent of the total popu-
lation). Two main reasons for the stagnation and drop in coverage are the
transformation of the labour market and the lack of adaptation of social
insurance to such change in most countries, as this article’s findings show:
• the covered formal sector has shrunk, while the uncovered informal sec-
tor has expanded and averages 47 per cent of the urban labour force;
• health reforms have extended legal coverage in merely five countries;
only Colombia set a goal of universal coverage, in 2001, and it remains un-
fulfilled;
• a third of the labour force are self-employed, either have legal voluntary
cover or are excluded in 17 countries for a statistical coverage of 3-36 per
cent, three countries have obligatory coverage, and in two (Brazil and Cuba)
virtually all self-employed workers are covered by the public sector, while
the majority of such workers in Chile are covered by the public-social insur-
ance sector that grants subsidies to poor and low-income people;
• a great barrier to social insurance coverage of the self-employed popula-
tion is that they must pay a percentage contribution equal to the sum of the
percentages paid by employees and employers: only Costa Rica with volun-
tary coverage incorporates half of the self-employed workforce, because the
State pays the equivalent of the employer’s contribution to the low-income
self-employed worker;
• the rural population ranges from 29 to 55 per cent in the latecomer-low
group and is excluded from legal coverage in half of the countries: the sta-
tistical coverage is 1-6 per cent but in Ecuador and Mexico, which have spe-
cial social insurance schemes for peasants, coverage increases to 18 and
28 per cent respectively;
• domestic servants constitute 4-10 per cent of the labour force and have
legal compulsory coverage in 13 countries, but the statistical coverage is
only 3-31 per cent because obligatory affiliation is difficult to enforce;
• there are no data on the proportion of employees in microenterprises
because they are informal: 5-20 per cent of them are covered in the late-
comer-low group, but 42 and 88 per cent in Argentina and Chile respec-
tively (pioneer-high group);
• indigenous populations are largely excluded from coverage because they
work in the informal economy and/or live in rural areas: Ecuador and Mex-
ico have been successful in including some of them in special schemes;
• as income and educational levels rise, coverage also increases and vice
versa, a trend accentuated in private insurance: in Chile private coverage
decreases with age while public-social insurance coverage increases; the
impact of the reform on coverage by income quintiles could be measured in
two countries only: in Colombia coverage first improved in all quintiles but
later declined, and in Bolivia coverage diminished in all quintiles; 29
• the best-covered geographical areas are those that are developed and
urbanized, whereas the worst covered are the least developed and rural:
only two countries have compensation funds to reduce inequalities be-
tween regions or states;
• the healthcare system is not neutral but determines the degree of exclu-
sion; for instance, a segmented system without coordination between the
three sectors (also between federal, state and municipal levels in some
countries) and with weak regulation and low solidarity is typical in half of
the countries (seven in the latecomer-low group and three in the interme-
diate group) which have the lowest coverage, while conversely countries in
the pioneer-high group have reached virtual universal coverage with dif-
ferent systems but integrated and with solidarity: unified social insurance
in Costa Rica, unified public sector in Cuba, and public-social insurance and
private dual system with coordination in Chile, the first with total state fi-
nancing and the last two with significant fiscal subsidies targeted on poor
and low-income groups.
The main recommendations in this article are as follows:
(1) develop accurate statistics on coverage and access, as well as on the
characteristics of the population uninsured or excluded from access, to de-
sign adequate policies of inclusion;
(2) coordinate the actions of international and regional organizations, all
of which now give priority to the extension of coverage and agree on several
policies, such as targeting fiscal subsidies on poor and low-income popula-

tions, incorporating the informal sector, compulsorily providing a basic pack-
age of specific benefits guaranteed to all the population in the three sectors and
regardless of labour status, income and risk;
(3) assign more resources to promotion, prevention and primary curative
care, as well as the maternal-infant group;
(4) extend legal integral coverage to the spouse of the insured person and
their dependent children until they reach adulthood, as well as to all pen-
sioners;
(5) integrate or at least achieve high coordination particularly between the
public and social insurance sectors, in order to eliminate duplications, save
resources, and be able to extend coverage to those excluded, which implies
the elimination of fiscal subsidies granted to separate schemes for powerful
groups;
(6) adapt social insurance to the changing labour market, infusing flexibility,
creating special schemes for peasants, targeting fiscal subsidies to incorporate
low-income self-employed workers, and launching educational campaigns
and better operation of the compulsory affiliation of domestic servants;
30 (7) reduce the significant differences in coverage between geographical
areas through better allocation of resources, targeting and compensation
funds;
(8) give priority to the coverage of indigenous populations currently ex-
cluded or with very low coverage and suffering extreme poverty, through tar-
geting in the geographical areas where they live, extension of the basic package
and fiscal subsidies.
The postponement of the reforms required to extend coverage would
worsen the current situation; hence the unavoidable need to carry out inno-
vative measures — otherwise the decline in the healthcare protection of the
population will accelerate and negatively affect social security.
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The extension of healthcare

coverage and protection

Distinguished Service Professor Emeritus of Economics,

In the past 25 years almost all 20 countries of Latin America

T he majority of countries in Latin America have three health sectors: pub-

Analysis of healthcare coverage and its problems

Composition of and transformation

Table 1. Population groups difficult to cover by social insurance, Latin America,

Source: Mesa-Lago, 2006.

In virtually all countries in the region, political constitutions and laws of

Estimates of statistical coverage

Table 3 exhibits estimates of the percentage of the total population covered

Table 3. Healthcare coverage of the total population by the three sectors,

Differences in coverage by income level,

Statistics of 12 countries on the population covered by social insurance by in-

able indigenous population it is concentrated in the poorest, most rural

Coverage of groups difficult to incorporate

Coverage of the self-employed population is often given as a proportion of to-

optional. The immense majority of these workers only have presumptive

Access and utilization

medicine or self-medication, while 54 per cent lack potable water at home

Causes of the low coverage and non-fulfilment

Policies to extend healthcare coverage

The need to develop reliable statistics on coverage

In view of the fundamental void when it comes to accurate total coverage

sons/users containing basic information. It is surprising that half of the

Approaches of international and regional organizations

Several international and regional organizations have conducted analyses

covering the formal salaried sector through public or quasi-public risk-

It would be ideal that all these international and regional organizations

Specific recommendations to extend coverage

Incorporation of difficult groups 25

cial and actuarial studies and identification of new sources of financing to

Reduction of differences in geographical

The significant differences in coverage in geographical areas, particularly in

Household surveys show that in various countries (mostly in the late-

Social health insurance has been in operation as long as 80 years in some

policies, such as targeting fiscal subsidies on poor and low-income popula-

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