14 julio 2021

A Limit to the Right to Choose Union’s Health Insurance. Published on

Executive Order No. 438/2021 denies employees the right to choose health insurance at their own convenience and creates a system that benefits ineffective unions, whereby employees who start a job must keep the health care insurance managed by the union at the respective industrial sector for one year and then can exercise the right to switch health insurance providers. Employees may exercise their right to change once during the whole calendar year, effective as from the first day of the following month after the request is formalized. 

Article by Julián A. de Diego published on on July 13, 2021

In addition to the hurdles that employees face when switching from one health insurance provider to another or when trying to get medical benefits, now the law imposes obligations to be met by providers, something that we all know is only fulfilled by just a few emblematic unions’ health insurance companies.   

This and other similar provisions are intended to promote an automatic change without delay when switching from one health insurance provider to another. And the aim is also to ensure beneficiaries access to full, detailed and adequate information about their health coverage, plan and programs easily available on the web page of each provider. But we find many contradictions between obligations and compliance.  

Nothing is said about those employees who lose their jobs and are undergoing medical treatments or require special services provided by their health insurance and cannot keep the same provider that has been covering them and their family members when they find a new job. In particular, the law does not deal with the case when the new health insurance provider is not in a position to continue providing the same coverage.

Then employees are co-opted by the union’s health insurance provider even if it does not provide any services, as it is often the case outside the most important city centers or far from the place where the health provider offers services because it is there where the leading companies of the sector are located.

Employees’ right to choose health insurance from their start date meant that they had a number of direct and indirect benefits that are now forfeited.

The most relevant benefits included:

1. Employees could avoid health insurance providers that do not offer any services and are still operating;

2. The right to choose promoted competition between well-equipped providers who strove to offer better services in terms of quality and efficiency.

3. Those employees who were located far from the most important city centers could choose a health insurance provider that offered adequate services in a town or small community.  

4. The possibility of switching health care provider affected those entities who continued collecting funds but outsourced services to private companies, i.e. received funds but did not provide medical assistance;

5. Employees could choose not only their health insurance provider but also the quality services they offered, such as maternity coverage, depending on the stages of the life course, or the disease they needed to treat or any special medical assistance they required.

6. The right to choose did away with any abuse of power or extortion by unions who required mandatory membership (which should be absolutely voluntary) as a necessary condition to access health care services.

7. The right to choose created options based on the quality services provided by each union’s health insurance providers, and not based on the industrial sector where employees worked.

8. Employees could choose union’s health insurance providers that offered assistance at prepaid private clinics or health care centers in exchange for an extra payment that covered more and better services.

This system has been criticized on the grounds that some health care companies controlled some unions’ health insurance providers, whether to enter the system or outsource services through unions’ health providers. For some people, it was a mechanism used to supplement and improve the system, and for others, it was a fraudulent maneuver through tortuous subsystems.

Working towards such fundamental goals as the pursuit of economic stability, economic growth and job promotion, the business sector has been the object of tax increases, export prohibitions, like in the case of meat-packing companies, and the ban on layoffs or suspensions plus double severance pay; all these measures are in place until the end of this year. Now businesses are hit again by an increase in costs because unions’ health insurance providers do not offer any services.

Subsidies for wages and suspensions under Section 223 bis (Employment Contract Act) have proved to be an insufficient palliative when companies are unable to operate, not even under controlled productive processes, unlike the so-called essential businesses.

There is no excuse for this reform, because it is adopted knowing full well that it reintroduces a privilege in favor of some unions and to the detriment of the constitutional right to a contributory health care system.

In addition, these new restrictions on the possibility of changing health insurance providers add to a number of measures that have been taken during the pandemic, amid contradictions, in particular as from March 20, 2020. Limitations and restrictions have been imposed to employees’ fundamental rights in a context where the paralysis of the economy as a result of the mandatory quarantine should have been avoided, and instead, quarantine has been repeatedly extended, causing the systematic loss of jobs in particular at SMEs and a negative impact on everyone’s income.