Ecuador’s Social Security health care program is short of cash; government shifts funds from pension reserve while critics say the system is in trouble

The Ecuadorian Social Security Institute (IESS) is moving money from its pension reserve to cover costs of the health care system. Government opponents claim that the move shows that IESS is in trouble due to lack of federal support.

Ricardo Espinosa, IESS director, Credit: El Comercio

According to IESS, annual costs of the health care system are $2.1 billion while contributions from members are $1.5 billion.

IESS Director Ridardo Espinosa blames the shortfall on poor administration and too many referrals from the system’s doctors to private specialists and clinics. He says, however, the problem is temporary and that the shift of money from pensions does no endanger monthly Social Security payments.

“All of members are protected,” say Espinosa. “Everyone will receive their pensions as well as quality health care.”

Government opponents say the shift of funds is prohibited by law and proves that the federal withdrawal of 40% support for the system earlier this year was a mistake. They also say that referrals to private health care providers are part of IESS’s stated commitment to provide good health care to its members.

Meanwhile, many private providers are complaining that the government is months behind in its reimbursements.

Espinosa says that neither the health care or pension systems are in trouble and that the law allows him to make administrative decisions, including those that require moving money from one account to another.

Critics claim that the government decision to add children of members to the health care system is the main source of financial strains. They also say that contributions from voluntary members, including housewives, are not enough to cover health care costs.