Medicus Freezes Premiums for a Year to Attract New Affiliates Amidst Market Woes and Government Scrutiny
Medicus, one of Argentina‘s major prepayment medicine companies, is taking an unprecedented step to lure new clients by offering them a one-year freeze on premiums. This move comes at a time when the company has experienced a significant drop in clients and operates in an environment marked by economic crisis and constant price increases in health plans.
The Struggle
In 2024 alone, Médicus lost nearly 25,000 affiliates, equivalent to approximately 20 people every day, leaving it with around 200,000 users. This represents a substantial decline for the ninth-ranked prepayment company, trailing behind industry giants like OSDE, Swiss Medical, Galeno, and Omint, which together hold more than 60% of the market and over 4 million clients.
The New Strategy
To turn the tide, Médicus is offering new affiliates a locked-in rate for a year if they join between January 1 and March 31, 2025. However, existing clients will not benefit from this promotion and will continue to face regular monthly adjustments.
Reactions from other prepayment companies have been quiet so far. Most continue to plan increases of between 3% and 3.9% for January 2025, surpassing general inflation rates. The Cámara de Instituciones de Diagnóstico Médico (CADIME) recently reported that while premiums have risen by an average of 435% in the past two years, payments to health providers have only increased by 160% to 224%. This discrepancy, coupled with an inflation rate in the health sector of 583%, has sparked tensions between prepayment companies and their providers.
The Tipping Point
Médicus’ seemingly desperate move could pressure other prepayment companies to reconsider their strategies, given that over 200,000 people abandoned the sector in the first half of 2024 due to persistent price hikes. Despite the potential attraction of Médicus’ offer, new affiliates should bear in mind that it only applies to base premiums and not copayments, and may still be affected by changes in age group, family composition, or interruptions in attested coverage.
The Bigger Picture: Health in Argentina
The sector’s price liberalization, prompted by the government midway through 2024, has allowed prepayment companies to adjust their fees freely, leading to significant monthly increases of up to 30%. Despite efforts to curb these increases and ensure accessibility, most companies prioritize financial sustainability in the face of inflation. Customer discontent has grown, reflected in social media outpourings and complaints about suspected abusive practices.
