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Thursday, September 28, 2023

Devaluation and Medical Insurance

SINCE 1990, the National Insurance Institute (INS) has been selling a medical insurance policy sometimes called Plan 16 and other times Seguro de Gastos Médicos del INS (INS Medical Expenses Insurance). A lot of people in the expatriate community have obtained this type of coverage, either individually or through the Canadian Club, the American Legion, the Association of Residents of Costa Rica (ARCR) or other groups.


When you buy any insurance, an “insured amount” or “insured value” is always stipulated on the policy. This refers to the maximum amount the insurance company will pay for your claims, under the terms of the contract. For example, if you have a Plan 16 with an insured amount of ¢8 million ($16,000), that sum is the most INS will pay for your health in the policy year. Every year when you renew the policy, you wipe the slate clean and start with a fresh ¢8 million.


Plan 16 was designed basically for coverage within Costa Rica, so the insured amount is in local currency, colones. In 1990, when Plan 16 was first available, the insured amount was ¢1 million, which at the time was the equivalent of nearly $12,000 – pretty good coverage in those days, before medical costs escalated.


DURING the 1990s, as inflation kept eroding the purchasing power of the colón, every few years INS would raise the maximum insured value. The last time was in 1999, when it was raised to ¢8 million.


In January 1999, ¢8 million was equivalent to nearly $30,000, and this still went a long way. For example, translated to “medical-monetary” terms, Plan 16 in 1999 would have been able to cover roughly one and a half triple bypasses in a hospital of the category of San José’s Clínica Bíblica, or 15 appendectomies, or 40 broken legs. Not meager coverage by any means!


Today, things are different. Although ¢8 million is still the highest insured amount available on Plan 16, it is now equivalent to a little more than $16,000. Medical costs in Costa Rica have accelerated in this decade with the arrival of a new, luxurious hospital. Nowadays, there is no way Plan 16 would be able to cover a triple bypass; it would probably be enough for only five or six appendectomies, or 15 broken legs.


WITH regard to premiums, the rates for Plan 16 have more or less held steady with the U.S. dollar. Of course, most people don’t feel this, because as they get older their premiums escalate, as the rates are on an upward curve – the older you get, the higher the premium.


Despite higher premiums, perhaps because of increases in medical costs, for several years INS has complained that it has been losing money with Plan 16. To try to reduce the claims-to-premium ratio, the institute has fiddled with the workings of the policy – changed the deductibles, varied the “point” system that indicates how much INS pays for each specific treatment, etc. The latest change – effective this year – is that the 10% discount for the “special” group policies, such as American Legion, ARCR and the Canadian Club, has been eliminated.


The outcome is that people who have Plan 16 are now getting much less than before for their premium dollar – and this tendency is not going to be reversed, for a couple of reasons: INS has now stated (in writing) that Plan 16 is to be phased out; and it has superseded Plan 16 with a new medical policy called INS Medical, whose coverage is stated in U.S. dollars and which has lower deductibles and other advantages over Plan 16, making it an intelligent choice.


INS Medical comes in two guises: the Regional Plan, with an insured amount of $200,000, and the International Plan, which covers up to $2 million per year.


These are available for Costa Ricans, legal residents or people whose residency is verifiably in process. The INS Medical Regional Plan costs about the same as old Plan 16 – in fact, for some age groups the premiums are lower. For new applicants, an age limit of 65 applies (often extended), but INS will accept people who convert from Plan 16 up to age 70.


For more information, contact David Garrett at 233-2455 or The purpose of this column is to give the reader a better understanding of insurance in Costa Rica. The opinions and viewpoints expressed are those of the writer, and do not necessarily represent the official position of INS.



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