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Lecture explores Chile’s policies

Dan Brombach | Tuesday, November 6, 2012

Following the retrenchment of social policy under a period of turbulent military rule, Chile has endeavored to drastically reform its healthcare and pension systems, aiming to reduce poverty, inequality and provide a model for other nations seeking change.

Rossana Castiglioni, head of the political science department at Chile’s Universidad Diego Portales, outlined this social policy journey during her Tuesday lecture, titled “Against All Odds: Social Policy Rollbacks in Democratic Chile.”

Castiglioni said the democratically elected presidents of Chile in the 1990s, Patricio Aylwin and Eduardo Frei, inherited a system that split healthcare between public provision under Fonasa, a fund into which workers paid seven percent of their monthly income, and Isapre, a system of private healthcare providers.  For an additional premium, workers could buy into the private Isapre system in order to receive greater benefits and overall superior care.

Castiglioni said this system generated enormous amounts of inequality, with private providers charging certain demographic groups discriminatory prices in the hope of driving high-risk individuals to seek Fonasa government insurance.

“If you were a woman and you were at an age to have kids, they will charge you a lot,” Castiglioni said. “And if you are old, either pray or pay, because they will charge you a lot of money.”

Castiglioni said Aylwin and Frei were content to preside over further expansion of the private sphere of the healthcare system disproportionately favoring the wealthy.  She said it was not until President Ricardo Lagos took office from 2000 to 2006 that efforts were made to address growing inequalities and bolster support for the nation’s vulnerable citizens.

By introducing his AUGE plan, granting access to medical attention within a clear timetable to all patients who reach the inclusion criteria for one of 69 pathologies or medical conditions, Lagos implemented the greatest change to Chilean healthcare in 20 years, Castiglioni said.

She said despite Lagos’ concerted effort to eliminate discrimination in the private health system, and despite a recent ruling of the Chilean Constitutional Tribunal declaring such discrimination “inadmissible,” the issue has not yet been resolved.

“Lagos tried to tackle inequalities and discrimination, particularly in terms of age and sex, but the truth is that even though other parts of his reforms were approved discrimination still exists,” Castiglioni said.

Following Lagos’ term, President Michelle Bachelet took up the banner of social policy after Lagos’ departure from office, putting together an advisory council to elaborate a pension reform proposal, Castiglioni said. The March 2008 law drawn up by this team of economists and sociologists stood as a capstone of Chilean social reform, introducing a “basic solidarity pillar” through which 40 percent of the poorest of the population, many of who had never contributed to the system, would be entitled to receive an old age pension or a disability pension of around 100 dollars.

Although the recent changes in Chilean social policy have had a significant impact, Castiglioni said she ultimately does not feel they should be classified as structural reform. She blamed the lack of true structural reform on the dispersion of power, weakness of non-state actors and ideological distribution of the political system.

These three factors are holding Chile back from taking more aggressive steps in reforming its system of social protection, Castiglioni said.