The recently elected government, which will take office on 1 December 2018, has publicly announced that it intends to eliminate the private medical insurance currently granted to public officials as part of their benefits. This measure aims to:
- encourage public officials to use the state medical services; and
- reduce government expenditure.
The government currently spends approximately Ps3 billion on providing private medical insurance to more than 500,000 federal public administration officials and their direct relatives.
This measure will mainly affect MetLife Mexico SA, with which most major medical insurance policies have been taken out for the 2017 to 2018 period. These policies will expire in 2018, so the federal government is expected to refrain from renewing them with any insurer.
Once these policies have been cancelled, public officials will have to use the medical services offered by the Institute of Security and Social Services of State Workers (ISSSTE). Thus, the new administration will have to invest in improving the quality of services provided by the ISSSTE to meet the needs of public officers who require medical services.
If the cancellation of this benefit is confirmed, a significant number of officials are likely to seek major medical expenses insurance, which will present an opportunity for various companies in the sector. Insurers may promptly create insurance products to satisfy this new need.
For further information on this topic please contact Carlos Ramos Miranda at Hogan Lovells BSTL SC by telephone (+52 55 5091 0172) or email ([email protected]). The Hogan Lovells BSTL SC website can be accessed at www.hoganlovells.com
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