These Chilean women joined thousands suing for discriminatory health insurance. Can reforms fix it?

If you’re a woman or over 60 in Chile, you have to pay two to three times more for your health insurance. At least, when it comes to private health care. Older people pay more, too. And if you have a pre-existing condition, like asthma, you’ll be denied coverage. But Chile’s government is debating right now whether to change that.

First, a breakdown of how health care works in Chile.

There’s the public system that anyone can access, which is paid for by a 7% tax on salaries. And then there’s the private insurance system called Isapre. You have to pay a lot more for it but it gives you access to specialists and better hospitals. And the waits aren’t nearly as long.  

Related: Is Canada’s health care system a cure-all? 

That’s what María Pilar Iturrieta, a lawyer in Santiago, wanted. Pilar has a 5-year-old daughter named Guadalupe who was born with a cleft lip. Guadalupe needed specialty care, which she could only get through the private Isapre system.

But when Pilar applied for private insurance, she was rejected three times because of her daughter’s condition. 

The profit-minded Isapres, she said, doesn’t want to insure sick people.

“Isapres say they can’t afford to insure sick people. It’s a health care system but they don’t want to work with sick people. It’s a win-win for them.”

“Isapres says they can’t afford to insure sick people. It’s a health care system but they don’t want to work with sick people. It’s a win-win for them,” Pilar said. 

So Pilar decided to take Isapres to court. She argued that health care is a social right guaranteed under Chile’s constitution. 

“But Isapres says ‘no, no, no, this causes us a problem because we are looking for profit not to recognize your right to health,’” she said. “That is the hypocritical system that exists today in Chile.” 

It’s true that Isapres does charge more for people who need more care. That’s how insurance works. But in most countries, health insurance systems don’t deny people plans, they just increase the price.

Pedro Barría, also a lawyer in Santiago, has sued Isapres quite often. So much that he was selected to sit on an executive commission aimed at reforming the system. He said the private system’s biggest problem is that it treats people like a commodity — like a car.

“When car insurance says [it] won’t give you insurance if your car is dented, crashed, or is in bad conditions — that’s OK,” he said. “But it is not OK that health insurance tells you that I won’t insure you because you have cystic fibrosis or high blood pressure — those are things, the latter is people.”

Related: Canadians fear drug shortages as US seeks to import drugs

Prior to 1981, Chile only had a public health system. But when the military dictatorship of Augusto Pinochet took over in 1973, the private system was birthed 8 years later. It was a risk-based structure designed for profit. Even pregnancy was considered a pre-existing condition until 2014.

“The idea under this system is that everyone is the master of [their] future, which is rubbish as there are people who don’t have the same opportunities and can’t choose to be sick, disabled, a woman or old but have a right to good health care.”

Guillermo Paraje is an economics professor at Universidad Adolfo Ibáñez and also sat on the same commission as Barría.

“The idea under this system is that everyone is the master of [their] future, which is rubbish as there are people who don’t have the same opportunities and can’t choose to be sick, disabled, a woman or old but have a right to good health care,” he said.

Apparently, the court agreed and ruled in María Pilar’s favor. It said that denying health care based on a pre-existing condition is discriminatory and unconstitutional. But that only means Pilar is granted coverage, she still has to pay three times more than the average person because of her daughter’s condition and because she’s a woman. Women, if educated, earn on average 35% less than men, the largest wage gap across the Organisation for Economic Cooperation and Development (OCED) countries. 

And Pilar’s victory doesn’t help others in her situation. That’s because Chile’s legal system doesn’t recognize precedent. So people have to file their own lawsuits. Since the beginning of this year, more than 100,000 have sued Isapres — mostly over rate increases. 

Adriana Orozcosued to stop a 10% increase last year. Even though she won her case, Orozco said she’s still charged almost three times what her husband pays. It’s unfair, she said, but feels like she has no choice. 

Related: ‘Maternity jail’: Women in Argentina and the US find ways around restrictive abortion laws

“If you have a very good public service you would say OK, that’s fine but it’s not. In the public service, you can wait six months to a year for a surgery or an appointment with a specialist but private, you just call, you get next day or ten days maximum,” she said.

According to a study by the Isapres Association, roughly 50% of people in the public system want to be in the private system — they just can’t afford it. 

Like Orozco, many people who sue Isapres win.

“Isapre has a big problem because obviously, this is not sustainable,” said Gonzalo Simon, president of the Isapres Association. 

Simon said Isapre is willing to make some concessions to put an end to these lawsuits, though, in the past, it’s fought any reform.

“Today we have many experts and many economists who say this is the best way to do it,” he said. “But maybe society doesn’t want these discriminatory prices, so the politicians are the ones who have to choose what system they want.” He also said that whether or not their fees are discriminatory is “subjective.”

Under a new government proposal, people with pre-existing conditions could get private coverage. Women would pay the same rates as men. And the government would more or less regulate rate increases, so Isapres wouldn’t be sued as often. 

Some critics say that instead of tinkering with private coverage, Chile should focus on improving its public system.

But for now, it’s up to congress to decide whether to approve the private reforms. If it doesn’t, Isapres should expect the lawsuits to keep coming.