Becoming Cuenca

Medical Coverage in Ecuador: Health Insurance and IESS

Mar 16, 2024

Please note I am ‘not’ being compensated or being given anything free. What I have written for this post is honest and unbiased as possible to help you make an informed decision.

 

It has been said that the greatest wealth is health.

But achieving that can be difficult. Especially when you live in a country that you have little or no experience with.

Many people leave the United States because of the outrageous cost of healthcare. According to reliable, well-respected sources, the average American spends $12,900 per year on healthcare. That figure is based on total amount spent divided by the approximate 342 million people of all ages in the U.S.

The U.S. is a kick butt #1 in the world. The second most expensive country in the world for healthcare is Germany, followed very closely by Switzerland.

Germans spend $7,400 per person for healthcare. That is $5,500 less per person than the United States. Another way to look at it, Germans spend only 57 percent of what Americans do for healthcare.

Needless to say, Ecuador is a lot less than the United States and Germany.

But does paying less get one good healthcare?

We all know this famous saying: “Pennywise and Pound (£) foolish.” It is an old British saying one gets a great deal, but it costs them a lot of money in the long run.

If one pays a lot less for healthcare, is it better? That can be subjective, but Numbeo and RankingRoyals, the No.1 global rankings, statistics and lifestyle network attempted to do that.

According to those two organizations, Cuenca, Ecuador is ranked #8 in the world. It is the highest ranked Latin American city and is six spots above the highest ranked U.S. city, Cleveland.

A quick personal example for you: Last year, my family doctor ordered a CT scan of my brain. The average price for this 75 minutes procedure is about $1,528 in the United States. With Dutch equipment (Philips), my CT scan at a private facility was $231 or about 15 percent of the same procedure in the U.S.

Healthcare is important to more than just expats. A survey by Multitrabajos showed 55 percent of Ecuadorian respondents rated security their number one concern, followed by unemployment and underemployment at 32 percent, with healthcare at #3 at 19 percent.

That percentage will probably be going up with the ongoing troubles with IESS – Instituto Ecuatoriano de Seguridad Social. It is the public health system for Ecuador, but it is broke.

IESS can’t do what it is charged to do.

Eight years ago, all hospitals in Ecuador were obligated to take IESS patients. But no longer as IESS owes millions of dollars to the hospitals in the country.

The only way an IESS patient can go to a private hospital these days is for an emergency and one has to have a waiver stating IESS cannot accept them due it being full.

One of our Ecuadorian drivers told us recently that he had to take his mother to Hospital José Carrasco Arteaga, the IESS hospital in Cuenca. Before they could do the procedure, the hospital gave him a list of standard medical supplies to purchase that every medical facility should have. Needless to say, he was incredulous.

An American expat, Ric, told me that two of his last three appointments with IESS had to be rescheduled “because the system is broken.” To make matters worse, the expat cannot get his medicines from IESS because the doctor needs to approve them.

That couldn’t be done so he will have to wait for his next appointment in three months to get them. “If they even have them,” Ric added.  Ric contacted the IESS doctor, and his response was essentially “not my problem.”

Another American, Karen, sat in a wheelchair in agony for three hours at the IESS hospital with two cracked ribs from a fall. “I was in agony, and they couldn’t be bothered to even look at me,” Karen said. “There was a huge sign on the wall letting you know that ‘only if you were about to die’, would you be seen immediately.”

Karen said there was a total callous disinterest of IES staff. “Everybody else waiting there could see the pain I was in,” said Karen. “And they were very concerned about me not being treated immediately as I was moaning and fainting from the pain.”

The fourth story involves the city in the photo above and our friend, Tracy. She has to have continuing treatments with IESS.

Last month Tracy tried to get an appointment with IESS. There was nothing available in Cuenca for three months (which seems to be the magic period of time). Because she needed the treatment now, Tracy was able to get an appointment at the IESS facility in Azogues.

Azogues is in Cañar province. It is just over 20 miles north of Cuenca. This meant Tracy had to hire a driver at $15 per hour to take her to Azogues and wait for her to be treated.

A half-month ago, IESS President Eduardo Peña said his expectation is that the government will allocate more than $2.3 million to IESS following the approval of the VAT (Value-Added Tax) increase.

But will that extra money really make a difference? The IESS budget for 2023 was $2.355 billion. The $2.3 million would be nice, but that is only 1/10 of one percent of last year’s budget for IESS.

Peña is proposing an increase of IESS monthly payments from 20.6 percent to 30 percent of one’s income. He claims the increase is necessary due to current budget shortfalls and to the demands of an ageing population.

The other problem that Peña did not mention is that most people are claiming they are making the minimum salary, which is $460 per month. I guarantee you every expat brings home more than that per month.

After hearing all of these stories firsthand, Joanna and I decided to jettison IESS for private insurance. We aren’t the only ones.

“After yesterday’s repeat experience, I have decided to look elsewhere,” said Ric.

“For high pain emergencies the best route to go is your nearest private hospital,” said Karen. “My recommendation would be Monte Sinaí or Santa Inés.”

“I opted out of IESS because you are supposed to pay them 18.39 percent of your income every month,” said Mady Gonzalez.

Mady is the 41-year-old owner of Mady Insurance (Edificio Los Alamos #202, Ordóñez Lasso y Los Alamos).

Born in Miami, Florida, the Cuencano grew up in South Florida. While in the U.S., Mady worked in the health field for the women infants and children program for the State of Minnesota. She did that for a couple years before moving to Cuenca.

She started work at Salud S.A., Latin America’s largest health insurance company. Mady worked for another insurance company before becoming the head of the insurance department at Hospital Universitario del Río.

“You get to see the other side of things,” Mady told me. “I got to see how hospitals and insurance companies work. I learned their language. That was a tough job, but a great experience.”

For over nine years, Mady has owned her insurance broker company. One cannot just start an insurance broker business because they want to.

One has to have five years’ experience working with the insurance industry. And companies like Confiamed only work with brokers; they do not like to deal directly with the client.

“I mainly work with expats, especially the older ones,” Mady told me. “I do not consider myself a businessperson. I like to help people.”

That is why she spent a couple of hours with me to explain how health insurance works in Ecuador. It is confusing to Americans, even ones who have been in Cuenca for several years.

Mady immediately explained that what most foreigners do not understand is that health insurance is really prepaid medical care. On their website, Hospital Vozandes Quito said, “A prepaid medicine plan gives you access to hospitals, prestigious laboratories and medical centers.”

What that means is each insurance plan has a network of hospitals they work with.

Humana does not have a deal with Hospital Santa Inés. Confiamed has all of the big private hospitals in Cuenca as part of its network, including Hospital Santa Inés and Monte Sinaí. Many people, including Mady, think Hospital Santa Inés is the best private hospital in Cuenca.

“You get the best hospitals in Ecuador with Confiamed,” Mady told my wife and me. “It helps that they are owned by Banco Pichincha, the largest bank in Ecuador.”

Unlike the U.S., where one shows their medical insurance card and pays the remaining balance months later, Ecuador wants their money before you check out of the medical facility.

“There is no insurance card in Ecuador. And hospitals and pharmacies don’t care about your policy number,” said Mady. “It is all tied into your cédula number.”

When one goes to the hospital, one has to announce who their insurance company is as well as their cédula number. That is not always possible.

“I had someone who was unconscious when he entered the hospital on a stretcher,” said Mady. “The person with him called me for assistance.”

Before one checks out, the hospital or medical facility has figured out what the insurance company will pay them.

Mady says that if you are an outpatient, the medical facility will want a 20 percent “Garantía.”

If you stay at the hospital, they will want the difference between the total bill and what’s left on your deductible.

The bottom line is that you will be fronting the money and then having someone like Mady get your money back from the health insurance company. She helps her clients with all of the paperwork.

The deadline for submitting a claim varies with the company. Humana only gives one 60 days while Confiamed allows one 90 days. Every bit of documentation has to be submitted before the deadline to be considered for reimbursement.

Documentation includes facturas. It is an official itemized receipt that SRI (Ecuador’s internal revenue service) has approved.

Pharmacies are required to give one a factura. The patient gives the pharmacy their cédula number so it can be submitted to SRI. Upon approval from SRI, the pharmacy emails you the factura.

It is important that the patient gives the pharmacy their cédula number! If the spouse goes in to purchase the medicine and uses their cédula number, the insurance company will reject the claim.

Any reimbursements one is owed for hospitalizations are paid in seven to 10 business days with Confiamed. If you were an outpatient, Mady says it is three to five business days.

Your reimbursement would be deposited into your Ecuadorian bank account. If one does not have an Ecuadorian bank account, the insurance company will have to write a check and send it to you.

That means you could have thousands of dollars in cash, or you will have to find a means to get it to your financial institution in the United States or Canada. Anything over $10,000 leaving the country will get taxed (currently 3.5 percent but will be going up to 5 percent next month) by the Ecuadorian government.

Earlier this year, a headline in CuencaHighLife asked, “Did you know that in Ecuador, only 17 percent of vehicles are insured?” Scary, isn’t it? What happens when an uninsured driver hits you while crossing the street?

“Transito,” said Mady. “Ecuador has a law that says it will pay for your medical expenses until you are out of danger.”

That means upon leaving the hospital, it will not demand money for the time you were in intensive care.

“I had a client who was a pedestrian victim of a hit-and-run in Salinas. Her bill was $80,000 for two to three weeks in ICU,” said Mady. “Salinas is more expensive than Cuenca, so her daily ICU bill was $3,000.”

It is important that preexisting conditions are declared. Some common examples are asthma, high cholesterol, and high blood pressure. Breast implants are not considered a pre-existing condition if they have not caused the woman any problems.

For declared preexisting conditions (ones that you are aware of), they would have a waiting period of 12 to 24 months. The time depends on the preexisting condition and the insurance company. Immediate coverage would be for non-preexisting conditions.

Insurance companies like Confiamed will only cover pre-existing conditions up to 20 times the UBS (Unified Basic Salary) per year. For 2024, that is $460 per month thus the maximum for preexisting conditions is $9,200.

Since the UBS is tied to inflation, that $9,200 will keep going up. Example: If inflation is three percent for 2024, the new amount for 2025 will be $9,476.

Most Ecuadorian health insurance policies are only good while one is in the country.  For the rest of the world, one will need to get supplemental insurance. Medicare will cover an American while in the United States. Only for an emergency will Medicare cover you in Ecuador.

For my wife and me, I make sure we have enough coverage with travel insurance when outside of Ecuador. Many U.S. insurance companies will give you a policy up until one is 99 years old.

I know you’re itching to know… What is the cost of private health insurance?

There is no set answer. An American woman I know in Cuenca sent me the schedule above for Confiamed. I do not know her broker, but what Mady gave my wife and me was about a total of $14 more per month for us.

It all depends on the coverage. We opted for the $5,000 deductible per person to keep the monthly rate down. It is a lot of money but remember that the cost of healthcare is a lot cheaper in Ecuador than in the United States.

Joanna and I do not think we will approach $5,000 anytime soon as both of us are rather healthy. No doubt as we get older, that $5,000 may be needed, but we have saved enough money to cover it.

And to top it off, Confiamed will cover up to $500,000 per medical problem per year.

Let’s put our premiums into perspective. We are paying $2,112 per year for our health insurance in Ecuador.

The highly respected KFF (formerly known as The Kaiser Family Foundation) says the average annual health insurance premium in the U.S. 2023 was $8,435 for single coverage, $16,870 for a couple, and $23,968 for family coverage. These average premiums in the United States each increased seven percent in 2023.

Even if we both shelled out $5,000 for medical expenses, our total of $12,112 is nearly five grand less than what a couple in the United States pays for only insurance. As you know, they are still making copayments and most likely have deductibles, which raise the total amount they are shelling out for healthcare.

If this post has your head spinning and your eyes glazing over, I totally understand. And so does Mady. “It’s not easy even for my Ecuadorian clients,” Mady told me.

That is why you may want to talk to an insurance broker like Mady, who has two people supporting her and all of her clients. They can tell you more than I have written in this post, though I think I have given you a good start to make an educated and informed decision.

A lot more information on life in Cuenca can be found in my book, “Una Nueva Vida – A New Life.” Some say it is the most thorough book out there concerning moving to and living in this beautiful city.

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And please! Have several reliable sources of information before making any decision about moving to Cuenca.

Reliable information must come from dependable sources. According to the University of Georgia Libraries, a reliable source will provide a “thorough, well-reasoned theory, argument, etc. based on strong evidence.”

I consider myself a trusted source with my “strong evidence,” but you definitely need more than me for your big resettlement.

Salud, mi amigo.

 

Una Nueva Vida – A New Life

- by Stephen Vargha

There are over 80 professional-quality photos shot by me to give you a clear ‘picture’ about life in this historic mountain city.