Seguro Popular

Coverage Level: 48 million
Types of Benefits:
Primary Source of Funding:
Program Summary: 
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The Seguro Popular (SP) insurance program began as a pilot in 2001 and became law in 2003 with the passage of the System of Social Protection in Health (SPSS) legislation. The reform aimed to shift the portion of the health system that functioned as a national health service toward an insurance based system. The structural reform was designed to provide financial protection by offering publicly provided health insurance to the nearly 50 million Mexicans (50% of the population) who did not belong to a social security institute. Many of the insurance premiums would be subsidized due to the fact that a large portion of the country’s poor belonged to this segment of the population.

The Seguro Popular (SP) insurance program began as a pilot in 2001 and became law in 2003 with the passage of the System of Social Protection in Health (SPSS) legislation. The reform aimed to shift the portion of the health system that functioned as a national health service toward an insurance based system. The structural reform was designed to provide financial protection by offering publicly provided health insurance to the nearly 50 million Mexicans (50% of the population) who did not belong to a social security institute. Many of the insurance premiums would be subsidized due to the fact that a large portion of the country’s poor belonged to this segment of the population.

The SPSS was drafted with several complementary goals in mind:

  1. To establish the separation of purchasing and service provision at the state level, creating Social Protection in Health Regimes (REPSS) at the state level with two overarching mandates; to manage and administer financial resources and to coordinate the provision of health services for all interventions offered under the Universal Catalog of Health Services (CAUSES) benefits package. The network of health service providers would be composed of public State Health Services (SESA) organizations and private providers.
  2. To institute a culture of prepayment in Mexico in order to reduce out-of-pocket payments and catastrophic spending.
  3. To create an explicit benefits package in order to allocate resources rationally and cost-effectively.
  4. To create a third scheme within the public health system to stand beside IMSS and ISSSTE. The SP was envisioned as eventually being able to provide similar benefits leading to an eventual merger across the schemes.
  5. To shift the health financing function away from mandated contributions toward a system of funding that is conditional on implementing national health programs. With SP, the federal government makes contributions to states conditional on their participation in the program. In conjunction with receiving additional funds for the SP, states were required to sign a contract that committed them to certain levels of funding. Because the federal grants offered to the states were significant, it was difficult for them to decline.

There was a seven year, legally mandated phase-in period for Seguro Popular, leading to the eventual insurance of all uninsured households. Priority was given to poor families in high deprivation areas, as well as to rural and indigenous groups. Affiliation started in 2002 during the pilot program, and by the time the law took effect in January of 2004, the affiliation process was taking place in 24 of 32 states. During the pilot program phase, states were not asked to contribute their share for SP financing. The affiliation process began with the poorest quintile, making the scheme highly progressive during its initial years. The implementation of the program among Mexico’s 32 states occurred gradually from 2001 to 2005. Similarly, coverage within the states has occurred gradually.

Funding within the SPSS is allocated to four distinct components:

  1. Stewardship, information, research and development. Financed through the regular budget of the MOH.
  2. Community health services. Financed through the Fund for Community Health Services.
  3. Non-catastrophic personal health services. Financed through the Fund for Personal Health Services of the Seguro Popular.
  4. High-cost personal health services. Financed through the Protection Fund Against Catastrophic Expenditures of the Seguro Popular.
Funding: 
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The SP is financed by the federal government, the state government, and enrollees. The federal and state governments fund a social solidarity contribution while enrolled families contribute a premium that is tied to income. Families in the two lowest income deciles and those in the third lowest decile with a child under five years of age are not required to contribute, conditional on their participation in health promotion activities. Annual family contributions range from $60 USD for families in the third lowest decile to $950 USD for families in the highest decile. Family premiums are collected at the state level, where they remain to be used to fund the essential benefits package.

The SP is financed by the federal government, the state government, and enrollees. The federal and state governments fund a social solidarity contribution while enrolled families contribute a premium that is tied to income. Families in the two lowest income deciles and those in the third lowest decile with a child under five years of age are not required to contribute, conditional on their participation in health promotion activities. Annual family contributions range from $60 USD for families in the third lowest decile to $950 USD for families in the highest decile. Family premiums are collected at the state level, where they remain to be used to fund the essential benefits package.

Federal funding for the SP takes the form of two distinct contributions to the states—the social contribution and the solidarity contribution. The social contribution by the federal government is a fixed allocation per enrolled family and is periodically adjusted for inflation. The SP federal contribution comes from general taxes. The federal solidarity contribution is meant to redress the large differences in development between the states. It is 1.5 times the social contribution and is generally larger for poorer states. The solidarity contribution is based on a formula that considers a per family fixed component, a health-needs adjusted component, a component aimed at promoting additional state contributions, and a component based on health system performance. The goal of this resource transfer mechanism is to make up for historical imbalances and inequities, to respond to the needs of different population groups, and to provide incentives for performance and affiliation. The formula weights and the indicators used in the formula are updated annually.

The state contribution is similar in all the states, equaling approximately half of the federal social contribution. The family contribution is determined on a sliding-scale, with the goal that no family should contribute more than a fair share based on its ability to pay. Ability to pay has been defined as disposable income, which is total household spending minus spending on food. The family contribution equals a fixed proportion of disposable income, with a maximum of 5%. Income deciles three through nine have a nominal contribution, while the tenth decile has two levels of contribution due to the variable nature of the income distribution. As of 2008, 97% of families made no premium contributions. Likewise, states have also failed to pay their full share of the premium.

  Seguro Popular Budget by Type of Contribution, 2004-2007

The framework of the reform creates certain paradoxes in its implementation. The percentage of families that are eligible to enroll in SP varies by state. The population of the northern industrialized states tends to have high levels of social security membership, whereas the population of poor southern states tends to have low levels of social security membership. This means that poor states with weak tax-based incomes must enroll a much higher percentage of their population out of state coffers compared to rich states with stronger tax bases. This appears to perpetuate inequality in health care delivery on a geographical basis. Because poorer states have the largest proportion of both the poor and the uninsured, and because the state contributions to the SP are established on a per-enrolled family basis, poorer states have to make a higher contribution than wealthier states, leading to increased geographical inequity. Therefore, federal resources are based on both a per-enrolled family fee plus a solidarity supplement for poorer states to help mitigate some of the adverse budgetary effects that stem from a large population of poor households.

The National Commission for Social Protection in Health (CNPSS) has established that states must target a maximum of 30% of their resources to purchase medications, 40% to contract personnel, and 20% for activities of health promotion, early detection, and prevention. Once the requirements for the transfer of resources have been met, funds are sent to the State Finances Secretariat. Before 2007, funds were transferred directly to the State Health Secretariats. The change was established due to the reporting requirements of the State Finance Secretariats, leading to increased transparency, as well as improving the registration and use of resources at the state level. Resources are transferred to the states every three months.

Since 2004, resources transferred to the Social Health Protection System have increased by an average of 11.5% annually in real terms, thereby reducing the gap between IMSS health expenditures and the expenditures of the Ministry of Health.

  Health Spending by the Ministry of Health and the Social Security Institutions, 2000-2010

From 2001 to 2003, the growth rate in per capita expenditures on public health for the uninsured population averaged 5.2%. Conversely, during the first few years of the reform from 2004 to 2006, this growth rate nearly doubled to 12.3% per year. From 2001 to 2006, public expenditure for the uninsured increased by 61% overall. Since the implementation of SP, public health expenditure increased from 43.8% of total health expenditure in 2002 to 46.4% in 2006. This trend of growing public health expenditures is expected to continue.

Population covered: 
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Enrollment in the SP takes place on a per-family basis. A family is composed of the father and/or mother, children and adopted children younger than eighteen or minors younger than eighteen who are dependents and live in the same household, those older than sixty-four years of age who live in the same household, single student children up to age twenty-five, and disabled children. Upon enrollment, families receive a pamphlet with their rights and duties that outlines the health interventions and services to which they are entitled.

Enrollment in the SP takes place on a per-family basis. A family is composed of the father and/or mother, children and adopted children younger than eighteen or minors younger than eighteen who are dependents and live in the same household, those older than sixty-four years of age who live in the same household, single student children up to age twenty-five, and disabled children. Upon enrollment, families receive a pamphlet with their rights and duties that outlines the health interventions and services to which they are entitled. The SP was intended to be rolled out at the health center level. Regions were permitted to enroll individuals only if they had sufficient facilities and human resources to provide adequate care under the program. Enrollment took place at the municipal level, which meant that many municipalities without adequate facilities were not initially able to accommodate large-scale enrollment. State ministries of health are responsible for promotion of the SP program. Voluntary affiliation takes place on a quarterly basis, but enrollees must wait until the following trimester to begin receiving services. Due to the voluntary nature of the program, enrollees must choose to re-enroll annually.

At the start of the program, the primary strategies for enrollment focused on large-scale affiliation campaigns for vulnerable families. Strategies that have been used to aid in the enrollment and re-enrollment process have included the following: coordinating enrollment activities with other programs targeted to poor populations; promoting enrollment in public gathering places like markets and health clinics; communicating with state and local governments to help identify priority populations; collaborating with local governments to speed the processing of official documentation; re-enrollment invitations through mass-mailings to current enrollees; using mass-marketing campaigns to motivate re-enrollment; and launching special brigades for special enrollment campaigns in localities with low levels of enrollment or re-enrollment. However, due to the fact that there were annual quotas on the number of new enrollees, certain states limited the size of their communication campaigns.

During the first years of the SP targeted populations were given priority affiliation. These included those living in rural regions, those who belonged to poverty alleviating programs such as Oportunidades, and indigenous populations. As of 2009, special targeted populations included newborns and pregnant women. Moreover, the last few years have seen the growth of unemployment leading many families to lose their rights to public services such as IMSS or ISSSTE, which has led to an expansion of the enrollment goals for SP beyond what had previously been established.

During the two years of the pilot program between 2001 and 2003, 614,000 families were affiliated. By the end of 2006, this number had increased to 4 million families. In terms of percentages, in 2005 the SPSS covered approximately 14% of the previously uninsured population. By 2009, this number had reached in excess of 90% of the uninsured.

Table 1: Affiliation Coverage per State, 2009

StateFamilies Eligible to AffiliateAffiliated FamiliesPercent Coverage
Guerrero453,086356,84078.76
Sonora220,580186,38584.5
Baja California287,255246,87285.94
Puebla600,167533,98588.97
Durango136,791122,13389.28
Michoacán431,638385,90689.41
Zacatecas213,695196,83592.11
Oaxaca604,530562,69293.08
México1,145,9861,069,50999.33
Tamaulipas348,392335,759 96.37
Colima91,64488,59496.67
Chiapas697,769681,71197.7
Nayarit143,256140,16097.84
Nuevo Leon228,323223,68297.97
Morelos222,175218,28698.25
Sinaloa245,675243,38699.07
Hidalgo338,799335,72999.09
Distrito Federal420,901417,83499.27
Baja California Sur45,06042,54594.42
Quintana Roo109,337108,68399.4
Tlaxacala180,006179,14799.52
Guanajuato673,749676,987100.48
Chihuahua244,316246,155100.75
Yucatán200,2842,002,097100.91
Jalisco572,002577,856101.02
Campeche117,869119,281101.2
Querétaro159,642163,407102.36
Aguascalientes123,148126,070102.37
Veracruz700,126719,806102.81
Coahuila157,516161,955102.82
Tabasco433,397445,920102.89
San Luis Potosi271,271282,282104.06

Source: Secretaria de Salud

Benefits package: 
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The design of the Seguro Popular essential benefits package was informed by two key sets of analytical inputs. The first set of analytical tools was composed of estimates of the burden of disease used to assess the severity of different health problems. The second set was made up of cost-effectiveness analyses used to weigh the potential population-level benefits of distinct interventions against their financial costs. The first benefits package was selected in 2002 and consisted of 78 health interventions. These interventions included primarily preventive activities as well as the detection and treatment of degenerative diseases.

The design of the Seguro Popular essential benefits package was informed by two key sets of analytical inputs. The first set of analytical tools was composed of estimates of the burden of disease used to assess the severity of different health problems. The second set was made up of cost-effectiveness analyses used to weigh the potential population-level benefits of distinct interventions against their financial costs. The first benefits package was selected in 2002 and consisted of 78 health interventions. These interventions included primarily preventive activities as well as the detection and treatment of degenerative diseases. In 2004, the number of interventions increased to 91 and by 2005 the number increased to 155. In 2006-2007, the number of covered interventions increased significantly up to 255 interventions, covering most causes of primary care visits and nearly 95% of all causes of hospital admissions. As of 2009, there were 266 interventions that were covered under the Universal Catalog of Health Services (CAUSES).

The benefits package can be divided into six distinct categories of services as follows:

  • 24 public health interventions geared towards the detection and prevention of diseases such as diabetes, hypertension, and tuberculosis.
  • 104 interventions within family medicine and specialist care
  • 25 interventions for urgent care and
  • 69 interventions for general surgery
  • 45 hospitalization interventions
  • 8 odontology interventions.

There is also a distinct benefits package for protection against catastrophic expenditures. This centrally managed fund, known as the Protection Fund Against Catastrophic Expenditures (FPGC) covered 17 interventions in 2006. By 2010, the number of interventions grew to 49 and included treatment for HIV/AIDS, bone marrow transplant, and childhood cancer. Care for most of these catastrophic events (84%) is provided by private service providers.

Service delivery system: 
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The Social Protection in Health Regime (REPSS) at the state level is responsible for forming and coordinating the network of health service providers. In practice, the first option (and often the only one due to political factors or lack of technical competence) is to contract for health services from the network of State Health Services (SESA), followed by limited contracting with the private sector. These contracts are signed on a yearly basis. Out of nine states analyzed in a recent study, only two actively contracted for services with private health care providers. As of 2009, the SP has started buying services from the IMSS-Oportunidades Program and it is expected that contracting for services will extend to both IMSS and ISSSTE.

The Social Protection in Health Regime (REPSS) at the state level is responsible for forming and coordinating the network of health service providers. In practice, the first option (and often the only one due to political factors or lack of technical competence) is to contract for health services from the network of State Health Services (SESA), followed by limited contracting with the private sector. These contracts are signed on a yearly basis. Out of nine states analyzed in a recent study, only two actively contracted for services with private health care providers. As of 2009, the SP has started buying services from the IMSS-Oportunidades Program and it is expected that contracting for services will extend to both IMSS and ISSSTE. Some expect that such contracting schemes will lead to the ultimate financial integration of the system. The reform also created a long-term framework for expanding health care facilities. As of 2006, nearly 1,800 new facilities had been built, including four high-specialty regional hospitals in the least developed regions of Mexico.

Service delivery for services that fall under the essential benefits package is decentralized at the state level due to the low-risk, high-probability nature of the interventions. High-cost tertiary care that falls under the FPGC, however, is delivered at regional or national health centers that offer highly specialized services. These types of procedures are often performed at private facilities.

Institutional structures: 
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Mexico’s health system is guided by the federal government but operations are decentralized to the state level. Family premiums as well as federal transfers are collected at the state level. The states are also responsible for the provision of health services. Health system oversight is carried out at the national level by the MOH.

Mexico’s health system is guided by the federal government but operations are decentralized to the state level. Family premiums as well as federal transfers are collected at the state level. The states are also responsible for the provision of health services. Health system oversight is carried out at the national level by the MOH.

The function of the Social Protection in Health Regimes (REPSS) at the state level is to integrate and coordinate the network of health care providers in order to guarantee that SP enrollees have access to the services offered under the benefits package. The mechanisms used to control the network of providers are subscription agreements and contracts with public, private, and civil society institutions.

The General Health Committee, which is chaired by the Health Minister, includes the leaders of all the public health institutions in Mexico as well as experts in the field, non-governmental organizations, professional associations and the private sector. This Committee is responsible for defining the diseases, treatments, and medications that are covered under the FPGC.

  Organization of the System of Social Protection in Health

Provider payment mechanisms: 
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The interventions included in the CAUSES are paid for by capitation. Meanwhile, the interventions carried out under the FPGC are paid for on a per-case basis. The payment mechanism for contracts with private providers is vague. The reform stated that health services should be provided by state health secretariats in accordance with the state of residence of the insured family or by other public health institutions that have contracted with the state health secretariats. After the passage of the law, however, the executive branch issued a by-law that introduced the option of contracting with the private sector. The problem with this by-law is that it does not specify the form that payments to private sector will take. Thus, such payments take place on an ad-hoc, non-systematic basis.

The interventions included in the CAUSES are paid for by capitation. Meanwhile, the interventions carried out under the FPGC are paid for on a per-case basis. The payment mechanism for contracts with private providers is vague. The reform stated that health services should be provided by state health secretariats in accordance with the state of residence of the insured family or by other public health institutions that have contracted with the state health secretariats. After the passage of the law, however, the executive branch issued a by-law that introduced the option of contracting with the private sector. The problem with this by-law is that it does not specify the form that payments to private sector will take. Thus, such payments take place on an ad-hoc, non-systematic basis.

Regulation: 
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There are two separate types of agreements for the operation of the Seguro Popular (SP) at the state level—Coordination Agreements and Management Agreements. The Coordination Agreements (CA) between the Ministry of Health and state governments began to take place in 2003. Their objective was to create the foundation of the Social Protection in Health Regimes (REPSS) at the state level, which would be the governing body that would implement the SP.

There are two separate types of agreements for the operation of the Seguro Popular (SP) at the state level—Coordination Agreements and Management Agreements. The Coordination Agreements (CA) between the Ministry of Health and state governments began to take place in 2003. Their objective was to create the foundation of the Social Protection in Health Regimes (REPSS) at the state level, which would be the governing body that would implement the SP. These agreements established the guidelines under which the REPSS would be established. Through these agreements, the federal government acquired the capacity to provide the necessary technical and logistic help to the states, as well as the necessary financial resources for the program to take off.

The Management Agreements (MA) establish the separation between the financing and purchasing of health services. These agreements function as contracts between two autonomous, legal entities. They are the basic mechanism through which health service providers receive public financing through the SP program. In this way, through the Management Agreements the REPSS in each state are able to establish the minimum quality standards for its enrollees as well as the efficient use of resources. Through the MA, specifications regarding the type of covered interventions and their cost are delineated. Finally, the MA also outlines the penalties for failing to comply with certain clauses within the agreement.

The Federal National Commission for Protection against Health Risks was created in 2001 and is charged with regulating key products and services within the health sector, including pharmaceuticals, health technology, occupational and environmental exposure, food safety, and health company advertisements. In this regard, its role as regulator and inspector of hospitals is important within the scope of the reform, since it has the authority to close down providers that do not meet quality standards.

Monitoring and evaluation: 
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The 2003 reform called for the creation of a robust information management system to gather information on SP enrollees. The MOH has responsibility for managing the system, which is used to identify contribution levels, assure resource allocation transparency, and to garner insights on service utilization and outcomes.

The 2003 reform called for the creation of a robust information management system to gather information on SP enrollees. The MOH has responsibility for managing the system, which is used to identify contribution levels, assure resource allocation transparency, and to garner insights on service utilization and outcomes.

The country level research and analysis that built the intellectual foundation for the reform program has continued, becoming a useful tool for the continued monitoring of the health system. Since 2001, the MOH has published annual benchmarking reports that include many different data points. Federal and State Health Secretariats have planned and budgeted for benchmarking state health system performance and reporting the results through the Citizen’s Accountability Forum, which is produced annually. The benchmarking reports have been published using performance indicators at the systemic, state, institution, and hospital levels. The indicators are used in conjunction with extensive surveys on the Mexican health system to provide a quality and performance reference point for the population to demand further improvements.

Each year has seen an increase in the depth of the information, including more refined indicators and survey data. Since the implementation of the Seguro Popular, various program evaluations have taken place. These include a series of studies on SP management processes. These evaluations have analyzed the services offered to beneficiaries, the management of services, the separation of functions, human resources, the technology platform, the purchasing and distribution of medications, the affiliation process, among many other themes.

The MOH has strengthened its capacity to monitor key variables, including population health, coverage of interventions, health risks, and health outcomes. Several steps have been taken to improve monitoring capacity, including a system of national surveys, modernized vital registration and service delivery registries, computerized patient medical records, and improvement of state health accounts. Formal evaluations of the SPSS began in 2005. Since then, the MOH has conducted and made public periodic supervision and monitoring evaluations. Each of these evaluations has used diverse sources including the National Health Survey, the National Assurance and Health Spending Survey, and the Statewide Financial Protection Survey. These longitudinal surveys are part of a long-term external evaluation program in order to specifically measure the effect of SP on health conditions, effective coverage, health system responsiveness, and financial protection.

Results of the reform: 
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From 2000 to 2006, the ratio of per capita public expenditure for people covered by IMSS/ISSSTE to the per capita expenditure for the uninsured declined from 2.5-to-1 to 2-to-1 and is expected to continue falling due to the legislated growth of SP. Furthermore, during the same time period, the ratio in per capita allocations between the state with the largest allocation and the state with the lowest allocation diminished from 5-to-1 to 4-to-1. During this time, the MOH budget increased by 69%, leading to a more equitable distribution of resources between the previously uninsured and those who belonged to the social security institutions.

From 2000 to 2006, the ratio of per capita public expenditure for people covered by IMSS/ISSSTE to the per capita expenditure for the uninsured declined from 2.5-to-1 to 2-to-1 and is expected to continue falling due to the legislated growth of SP. Furthermore, during the same time period, the ratio in per capita allocations between the state with the largest allocation and the state with the lowest allocation diminished from 5-to-1 to 4-to-1. During this time, the MOH budget increased by 69%, leading to a more equitable distribution of resources between the previously uninsured and those who belonged to the social security institutions.

A recent survey found that satisfaction with the SP is high. Among enrollees, 69% stated that quality of health services was good or very good. Furthermore, 85% of enrollees stated that program benefits were clearly or very clearly explained by officials. Finally, 94% stated that they were treated well during the affiliation process, with 97% of enrollees planning to enroll for the next year. In terms of service usage, families that enroll with SP increase their incidence of health care utilization, particularly in regard to health center visits and hospitalization, while decreasing their usage of private care providers such as private doctors and pharmacies. Thus, the reform program has led to systematic improvements in health care provision for those who had been uninsured prior to the reform.

Congratulations on a thorough

Congratulations on a thorough overview of Seguro Popular. Some comments and updates are in order:

  1. Seguro Popular, in spite its name, is not really an insurance scheme, and does not purport to "to shift the portion of the health system that functioned as a national health service toward an insurance based system." Its main function was to bring fresh public financing to care for the poor and uninsured through a more transparent, performance-based system. Affiliation into a voluntary scheme was a mechanism to trigger funding, and providers were only required to re-affiliatte families in order to claim a second tranche.

  2. From 2010, the unit of affiliation to Seguro Popular changed, from the family to the individual. While the measure aimed to increase accountability in the affiliation process, it also provides incentives for adverse selection. However, the measure was countered in 2011 with an increase of the non-contributory population, from the lowest two deciles to the lowest four. In any event, family contributions were much lower than expected and seem to be on their way out. This further suggests that Seguro Popular is not an insurance scheme.

It would be useful to review the insurance vs. national health service debate in light of Seguro Popular.

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