In a controversial move, the Public Services Regulatory Authority (ARESEP) Thursday eliminated a subsidy for diesel fuel in place since the 1970s. This will raise the cost of one liter of diesel ¢17 ($0.03) as soon as the price hike is published by the official government daily La Gaceta, likely in January, according to ARESEP spokeswoman Ana Carolina Mora.
The price of one liter of diesel will increase from ¢347 ($0.67) to ¢364 ($0.71). At the same time, the cost of one liter of super gasoline will drop from ¢516 ($1) to ¢488 ($0.95) per liter and regular gas will drop from ¢486 ($0.94) to ¢460 ($0.89) per liter, according to a statement from ARESEP.
Diesel and airplane fuel been subsidized for 30 years because part of their cost has been covered by the sale of gasoline, according to the daily La Nación. Income from the sale of diesel fuel makes up 40% of the National Oil Refinery's (RECOPE) total income.
Maritza Hernández, president of the National Chamber of Transport Workers told La Nación the diesel hike is a “terrible” decision that will force diesel-guzzling bus companies to pass the price increase on to consumers.
The diesel hike could also make Costa Rica less competitive in terms of production, since this fuel is used to make exported products, Rafael Carrillo, president of the Union of Private-Sector Chambers and Associations (UCCAEP) told the daily.
In other news, ARESEP also approved Thursday an increase in taxi fare to go into effect as soon as it is published in La Gaceta. The price of the first kilometer of a taxi ride will increase from ¢330 ($0.64) to ¢365 ($0.71), while each additional kilometer will increase from ¢300 ($0.58) to ¢340 ($0.66). |
Héctor Orlando Martínez, a leader of the Revolutionary Armed Forces of Colombia (FARC) arrested here in August, was extradited yesterday to Colombia, according to a statement from the Public Security Ministry.
Martínez is accused of participating in a massacre in the community of Bojayá, Colombia, in which insurgents fired on a church where the local population had sought refuge, killing more than 100 people. He is also believed to be part of the “ Frente 58” FARC group responsible for moving drugs and arms through Central America, the statement said.
Martínez was arrested Aug. 10 in the Pacific port town of Puntarenas, where he had been living since 2001 after he married a Tica and quickly obtained Costa Rican residency (TT, Aug. 18).
He was extradited for “national security measures and to give absolute respect to human rights,” said Public Security Minister Fernando Berrocal. Immigration Police, National Police and Judicial Investigation Police (OIJ) coordinated efforts to process his extradition.
Martínez could face up to 40 years in prison if he is convicted of the 2002 killings.
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When you buy any insurance, there is always an “insured amount” or “insured value” stipulated on the policy; this means the maximum amount the insurance company will pay for your claims, under the terms of the contract. For example, if, like many members of our foreign community, you have a Plan 16 medical policy with an insured amount of ¢8 million, that sum is the most the National Insurance Institute (INS) will pay for your health in the policy year. When you renew the policy each year, you wipe the slate clean and start with a fresh ¢8 million.
Plan 16 was designed basically for coverage within Costa Rica, so the insured amount is in local currency, colones. In 1990, when Plan 16 was first available, the insured amount was ¢1 million, which at the time was the equivalent of nearly $12,000 – pretty good coverage in those days, before medical costs escalated.
During the 1990s, as inflation kept eroding the purchasing power of the colón, every few years INS would raise the maximum insured value. The last time was in 1999, to ¢8 million. In January 1999, ¢8 million was equivalent to nearly $30,000, and this still went a long way. Today, however, ¢8 million is equivalent to $15,400, and it simply doesn't cut the mustard if someone has a serious accident or a lingering ailment.
At this time last year, INS announced it was going to “freeze” Plan 16 coverage at a maximum of ¢8 million, but that premiums would continue to rise, following inflation – and in this manner Plan 16 would be phased out. We INS agents were asked to encourage our clients to convert to a new medical policy called INS Medical, in which coverage is stated in U.S. dollars and which has lower deductibles and other advantages over Plan 16, making it an intelligent choice. This still stands – INS Medical is still the best choice for most people.
But INS has just flip-flopped about Plan 16. For 2007, it has increased the maximum insured amount to ¢10 million (this will be done automatically, i.e., those people who had ¢8 million in 2006 will get ¢10 million as of Jan. 1, 2007), and the premiums, in colones, will increase an average of 25%.
What happened? Early in 2006, we heard unofficially that INS was working on a new type of medical policy called seguro médico flexible (flexible medical insurance). In August, INS invited a select group of agents – including yours truly – to a conference about the new product. What it outlined was no better than Plan 16 and a far cry from INS Medical. So the assembled agents gave their opinion, and we believe that is why INS “killed” the flexible project and are back to sprucing up Plan 16 – which, as I have said, is quite inferior to INS Medical.
Claim Procedures
Starting in 2005, INS changed the usage of medical insurance cards. Previously, people who needed a minor treatment would select an affiliated doctor from a list. After the treatment, they would proffer their INS insurance card, which would take care of 70-80% of the bill, and they would pay only the deductible (20-30%) to the doctor. For larger, more expensive ailments, doctors would want to receive their money up front, so they would find 1,001 excuses why they couldn't accept the card, and the patient would have to pay the entire bill, then do the paperwork to claim for reimbursement and wait a month or two to get his or her money from INS.
From the standpoint of INS, this had three notable disadvantages: they were processing mountains of claims and – incredibly – not even INS bureaucrats like paperwork; some doctors made medical mountains out of molehills, and were brazenly overcharging INS for the treatments they administered; and as it was easy to use the INS card for minor ailments and purchases, lots of people were abusing the insurance – I even heard of people using their INS cards to buy dental floss!
So, in 2005, INS changed the use of the card. Now, if someone has a serious medical situation, they should instruct their doctor to obtain from INS a “preauthorization,” which means that the medic and INS agree on a price, and then the patient can use his or her card to pay the lion's share of the bill – only the deductible has to be settled. For minor expenses, the patient has to pay the bills and then prepare and present the paperwork for the claim, and wait for reimbursement. This, for dental floss, is hardly worthwhile.
In this manner, INS solved the three problems it was experiencing and, from the standpoint of an organization not known for being service-oriented, everything was hunky-dory. Clients with minor ailments are not so happy, because they can no longer use their INS cards and their paperwork has increased. But for clients who need major treatment – which is basically what medical insurance is for – the benefits of the change become obvious: they will not be overcharged and can use their INS cards to cover most of the cost.
Contact David Garrett at 233-2455 or info@InsuranceCostaRica.info. The purpose of this column is to give the reader a better understanding of insurance in Costa Rica. The opinions and viewpoints expressed are those of the writer, and do not necessarily represent the official position of the National Insurance Institute (INS). |
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