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Table 4 Financing Arrangements

From: State budget transfers to Health Insurance to expand coverage to people outside formal sector work in Latin America

Country Financing sources of the subsidization scheme (s) Calculation logic of subsidy Type of transfer mechanism Level of subsidization
Bolivia General government revenues;
District and municipal revenues;
Earmarked revenues from a tax on hydrocarbons [70]
Until 2013: For SUMI, 10% of central government’s transfers to the municipalities; for SSPAM, a premium of 56 USD per older person [53]
Since 2013 under the Integrated Health Services Program: Budget allocations, and 15.5% of municipal fiscal sources
Lump-sum [53] Full subsidization
Chile General government revenues, partly earmarked tax revenues: 1% increase in value added tax, tobacco tax, customs revenues; sale of the state’s minority shares in public health enterprises;
Contributions of partially subsidized [71]
Ministry of Finance defines a “Universal Premium” according to available funding and based on inflation-linked currency units [72] Lump-sum Full subsidization [27]
Colombia General government revenue (49% of revenues of subsidized scheme) [73];
Solidarity contributions from the Solidarity and Guarantee Fund (36%) [24];
District and municipal revenues (14%) (including earmarked municipal tax on gambling) [21, 24]
Capitation Payment Unit per subsidized member, prospectively calculated, risk-adjusted based on age (children under 1 year of age, women aged 15–44 and others), sex, and geographic area [74]
The average Capitation Payment Unit was US$302 in 2011 (US$506 for those contributing) [35]
Individual-based Full subsidization
Costa Rica Earmarked tax revenues on luxury goods, gambling, alcohol and tobacco (80% of subsidy amount)
Transfers from the Social Development and Family Assignation Fund (20%), with its funds coming from value added tax and a 5% payroll tax [75];
Contributions of the partially subsidized
Negotiated between the National Social Health Insurance and the Ministry of Finance based on the current minimum wage Individual-based Full subsidization; partial subsidization: contributions range from 3.75 to 11.00% of income (depending on the earned amount) [76]
Dominican Republic General government revenues [32] n/a Individual-based Full subsidization
Mexico Federal funding: Social contribution (~33% of revenues of Seguro Popular) and the federal solidarity contribution (~49.5%) from general taxes
State funding: State solidarity contribution similar in all states (~16.5%)
Household contributions
(~1%, not implemented) [20]
Three steps:
1) Social contribution is a fixed allocation per enrolled family, amounting to US$70 in 2011 [20]
Federal solidarity contribution (FSC): on average 150% of the social contribution (~US$105) [36]
State solidarity contribution: Fixed allocation of 50% of the social contribution (~US$35)
2) FSC adjusted based on enrolled individuals, health needs, and performance
3) FSC addresses inequalities among states: if FSC is lower than general federal transfers to states, FSC turns out as an additional budget transfer [20]
Individual-based Full subsidization [36]:
Partial subsidization (although not applied in practice): contributions range from US$60 to US$950 [22]
Peru General government revenues (over 90% of the subsidized scheme’s revenues);
Regional state revenues;
International donor funding;
Contributions from household for the semi-subsidized (less than 5%) [23]
Ministry of Economy and Finance transfers a pre-determined budget on a historical basis and controls its expansion [30, 34] Individual-based Full subsidization; Partial subsidization in the semi-contributive regime: about two thirds of the average expenditure per insured, approxi-mately US$67/year per insured [34]
Uruguay General government revenues [77] “Health Quota” per subsidized member, adjusted for sex and age using a formula that reflects evolution of domestic prices, exchange rates and wages [77] Individual-based Contributions are fully subsidized