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He just signed up for IESS heath care for $67 a month; Why do other expats pay much more?

Thousands of Ecuador expats has been affected by changing health care insurance requirements in the country. Rivers of mixed messages and misinformation, both from the government and the gringo social media, have left many wondering where to turn for an accurate accounting.

When Ecuador’s National Assembly passed a new immigration, the Ley de Movilidad Humana, early last year it contained two provisions that affected foreigners, one requiring foreign residents to have health insurance and another requiring visitors to show proof of insurance when they enter the country. However, because there was no developed infrastructure to support the new requirements, and because of legal challenges, the implementation of most of the regulations have yet to occur. A registration process in which expats were to provide proof of insurance was called off within days of the deadline and, more recently, the requirement for visitors was delayed indefinitely.

Unrelated to the immigration law but affecting some expats’ health care coverage, are new rules for voluntary membership in Ecuador’s Social Security system (IESS). Among the several benefits IESS offers, is health care. In Cuenca, it is estimated that 200 to 300 expats are members of the program.

The IESS hospital in Cuenca

About the same time that the new immigration law was passed, IESS announced that foreign resident members would no longer pay based on the national minimum wage — which amounted to about $70 a  month for a single person — but be required to pay 17.6 percent of the income reported in their residency application.

Almost immediately after the new IESS payment plan was announced, chaos ensued.

Thus begs the question: Is IESS drowning in the undertow of incompetent implementation of new regulations, or are there more complex legal issues  causing the confusion? Cuenca attorney Lina Ulloa, among others, says the new payment plan violates the constitution.

Anecdotal evidence suggests widely divergent fees being quoted to expats interested in purchasing insurance through IESS, depending on their location in Ecuador. Fees vary by hundreds of dollars.

Astonishingly, when I called around last week​ I could not find a single facilitator or lawyer outside of Cuenca or Quito who has ever recommended that expat clients pay the contested 17.6% of declared income.

To dig more deeply into the story, I decided to sign up with IESS myself, to test the waters and to better understand the options available to expats — at least in Cuenca.

I met with Monica Gonzaga, facilitator and asesora personal, and asked her about the state of affairs regarding insurance for visitors, visa holders who registered as retirees, and permanent visa holders who have lived in Ecuador for a number of years. Her response was detailed, cautious, and exposed what seems to be a rather fluid state of affairs. What astonished me most, however, was the changeability and unpredictability of the system.

Monica enrolled me as a voluntary member of IESS system online. My monthly contribution? $67.49 due in mid-April. And, I now have in my hands a Certificado de Afiliación and ID number issued by IESS.

It is the opinion of Gonzaga and others in the field that until clear, legal and enforceable rules are in place at IESS, confusion will continue to reign.

My successful IESS  enrollment, at a rate far lower than many of fellow expats pay, is a clear example of this.

The controlling issue surrounding the legality of any insurance increase, or variation,​ under Ecuadorian law is the standard of equality likened to most socialist countries; the bar of exceptionalism regarding ‘privilege’ is extremely high.

Lawyers who oppose the IESS increase point to the regulation as creating special classes of citizens: Expats who have the resources to invest in a business, or purchase a house, are offered a visa that exempts them from fees and charges that apply to the general population.

The contention here is whether the constitution of Ecuador specifically supersedes any efforts to enact Orwellian structuring that applies general or specific accommodations based on income, or investment, that is not equal to accommodation offered the general population.  (We are all equal but some are more equal than others.)

I spoke with one attorney, active in clarifying the IESS situation, who asked not to be named.

She said,  “I’ve become everyone’s least favorite person. I have tried almost daily for the last few months to get a definitive answer from regulators or others in a position of authority, and have had no luck.  It amazes me that on every occasion everyone I ask to speak to about the IESS fee issue is either out to lunch, sick, or is attending the funeral of his grandmother — yet ​again”.

For the time being let’s accept that we are in uncharted waters and that the ebb and flow of this issue will remain with us for a while.

Why not just sit tight and take to heart in the wisdom of Bette Davis who famously said, “Fasten your seat belts, it’s going to be a bumpy night.”

71 thoughts on “He just signed up for IESS heath care for $67 a month; Why do other expats pay much more?

  1. I wonder if Ricki, who is unhappy with her IESS premium, can disenroll and then enroll online again and receive the lower rate.

      1. Change – you mean state any amount? Different what you presented when applied for pensionado visa? Won’t it be a fraud? Are they complete fools to believe it with new legislature issued (even if not yet enforced?)
        Sorry, but I get a sense of some kind of idiocy in all this!?

  2. Come on get real if 1 person is only getting $1,000 a month total retirement and another gets $3,000 a month then the 1 who is getting $3000 should have to pay 3 times more for the I E S S That’s how it should be.

    1. It’s interesting that Ken Mokler’s comment that was posted 30 minutes ago is being held up for approval while comments from Mike, Jane H and Shane that were posted 20, 26 and 16 minutes ago respectively were not held for approval.

      Question for CHL moderators–what distinguishes
      these comments? Is there a list of IP addresses that automatically triggers a “pending approval by the moderator” message and delay? There was nothing offensive in Mr. Mokler’s message. Why was it delayed for approval?

    2. C’mon, get real Ken.

      If a perfectly healthy 25 year-old is here on a professional or investment visa and has an income of $10,000 per month should his monthly IESS insurance premium be $1760, while a 75 year-old pensioner with monthly Social Security income of $1000 and who has a diagnosed and documented terminal cancer at the time of IESS enrollment pays a monthly premium of $176?

      Is that really “how it should be”?

      1. Of course it should be. In your example the $1,760 would be a cost of business likely subsidized by the employer. The 25, if a saver, would accumulate greater savings during their time in Ecuador with the substantially lower cost living.

        1. You’re quite obviously not an actuary. And it’s a pretty good guess that you never ran a business.

          Question for you, Michael. When the 25 year-old and the 75 year-old go to the local car dealership here in Cuenca, should the older man be charged $25,000 and the young man be charged $250,000 for the same car?

          One other question. Which of the two is gaming the system and which is going to be a far greater burden on government-funded services?

          1. And it’s obvious you are not a Logician.

            There is no equivalency between a discretionary purchase of a free market good (car) and health care. Unless I am mistaken and the Government is in the car business ….

            1. If any entity can get away with charging a 25 year-old male in excellent health 10 times the premium of a 75 year-old with diagnosed terminal cancer, they need to go into competition with the Mafia.

              Even the worst of the worst doesn’t have the gall to try to get away with such an obvious affront to logic, actuarial tables or just plain common sense.

              It doesn’t take a logician (or even a 1st grader with room temperature IQ) to understand that you are reading the actuarial tables upside-down, my friend.

              1. You are mixing arguments but thanks for your thoughts.

                I suggest Resnik’s ‘Elementary Logic’ published in 1970.

                It’s a great primer.

        2. Dear Ken, even under the Communist regime there was no such thinking (I know, I’ve lived – not just visited there, for years). Congratulate that young man, he obviously had invested time, effort, maybe his family financial support, continues to apply his energy, calculates risks – you name it! – and he has to pay so much more compared to others who don’t have the same to say about themselves? This kind of thinking is unwise, hurts all (even you, for you might not find any charitable help in the future – soup kitchen, nursing hope admission in spite of your poverty, etc.) Even communists in the former Soviet Union came to abandoning this ideology – teaspoonful distribution to all in equal amounts. It creates profound poverty. By power (as in the former Soviet Union). Those with means and potential – will simply move. The world is open! Your life , even with your “smart” payments to IESS will definitely not be better. Many events, supported by the ” more loaded”, stop to exist, will become rare, or won’t be free for you to enjoy.

    3. Dear Ken…DO let us get real. If you go buy a car that has a sticker price of $30,000, do they sell it to you for $10,000? If you buy a jar of mayo at Supermaxi that has a sticker on it for $3, do they give it to you for $1?

    4. I am with you Ken. There should be a means test and a graduated payment system for expats. I think it’s inherently unfair to ask Ecuadorian taxpayers to subsidize the health care costs of expats who can afford to pay rates that are closer to the real costs.

      I am a Canadian resident looking forward to retiring to Ecuador. In some of our provinces an individual pays the same health care premium if they make a $1M or $30K per annum. It is simply silly.

      1. “subsidize the health care costs of expats who can afford to pay rates that are closer to the real costs”

        That’s the excuse Ecuadorians use when they want to “gringo” someone. “They have more so they need to pay more”. Bull.

      2. I like it! Your thinking is – as if that person gets that 1Mln as a gift from the government! So, why then the one with 30k income won’t choose getting 1mln to himself? Even those who inherit millions – with all the taxes and inheritance fees huge! – paid to the government even those should not be charged more – tax system takes care of that. May your jealousy/envy subside, it’s not healthy. My parents did all to bring me up in trying to develop myself, get all the education “your brain will be able to absorb, and then some!” – and “live enjoying your achievements, always adding to them, and you’ll be OK financially, and happy with choices you’ve made”. For all that efforts and growth do get rewarded as a result, and that reward for your choices, effort and commitment – just must be enough. Don’t feed your “natural” envy/jealousy – which both mean greed. There is the other way to channel those into something constructive, respectful, at least when raising young, cultivating in them (as well as in yourself, it’s never late!) – the ability to admire, get inspired, choosing role models. Much better, more profitable, and healthier.

    5. Then wealthier people should pay more in taxes as individuals? As this is a form of tax. Since they have more money….it is going the opposite in the USA…still that is your logic here – single payer universal health care to everyone no matter what income they have is the only correct option to a civilized caring and practical society as an option here. Why wouldn’t a society want to have all its people as healthy as possible to its benefits and productivity….Ecuador not being a first world country in name. Still it is a socialst country. Then all other sicialist first world countries (some 30) have free health care to its citizens and are doing just fine with it as there societies have adjusted to its importance as a priority. This may be the time for Ecuador in its chaos on this issue to address that.

    6. I believe the point of the article is investment visa holders and professional visa holders also have income, but pay $68/monthly no matter their age as their income is not registered upon getting residence.

    7. No, it should not be. Those who had worked more, or in professions paying more due to their education (cost them years and big money), proven talents, or worked 2-3 jobs, all income reported – they should not be punished for that. Paying 3 times more for THE SAME? For those who lived without much stress (personal situations not accounted here, it was their luck or mystery), or cheated ( enjoying cash, under-the-table pay) and found themselves on eternal diet when old – to celebrate being “smart”, giggle at us, sudden “fools”?!! I hope, not many think so. Maybe somewhat more – let’s say : $70 from those with that minimal amount declared on SS document (for pensionado visa), and either 1 or 2% on the exceeding that minimal amount, or, as a flat tax, $1 on every full $100 of declared and SS’ confirmed pension exceeding the minimal). This will help the system, and will be fair, and respectful to those who deserve to spend their high pensions on their well-earned life, not being forced to pay several times more than their mates, for THE SAME. And, after all, they are the people, who generously support so many great causes in Cuenca, in Ecuador! Those with no significant income definitely can’t , obviously, though they can and do contribute time, efforts, talents, skills. But, without the funds… You must admit, if robbed like this – they would not be generous to robbers, and friendly to giggling “smarties” – they’ll simply leave! Bitter, offended, heart broken.
      I’m sitting on my ready papers and boxes, with my dear Cuenca becoming gradually less dear, and potentially offensive. I’m witnessing more and more lovingly furnished/decorated homes offered as a package,”just bring your toothbrush”. I’m not going to take advantage of people’s misery. I feel, I could find myself in their home “in their shoes” in just a little while, with a smart investor’s visa (for now), but with a next blow of immature, unreliable, irresponsible step of authorities. I welcome all to think straight – the hurting, the envious gigglers, and those affiliated with government alike – please, contribute after thoroughful thinking!

    8. No, my dear, you’re wrong here. Sounds exactly like it was in the Communist regime I lived for some time, too long. You’re a democracy and freedom person, I guess? You’ve lived with American (Canadian? German?) tax system. Imposing flat rate on all leads to a regime and society of the former Soviet Union. Everyone got paid in the range of one – two teaspoonfuls (except party apparatchiks, they enjoyed life, though discreetly). Flat taxes/charges worked. The entrepreneurship and patents unreimbursed, private businesses declared a crime, borders locked, currency dubious (funny money, roubles). That’s why it blew up! Not by some help from outside – the nation understood that the system was suicidal, led to profound stagnation, alcoholism, corruption, poverty of all, pessimism…
      From your own country tax system, from your common sense ( with both not perfect, but it’s what we’ve had and done not that bad!) – you just have to come to a wiser conclusion. Health Insurance is somewhat like a tax, and somewhat like a product. As a product – you must charge everyone the same. As a tax – you need to apply kind of a flat rate on that pension (the minimal accepted for retiree visa), and additional (flat or progressive, in brackets) for amounts exceeding. But to see, that it won’t amount to some paying several times more, for the same. I think, regular $70 -100 per person, plus 1-2% from pensions exceeding the minimum. Well-to-do, achieved would pay more, feeling socially responsible and dignified, not robbed.
      And those green with envy would not chuckle.

  3. I know you’re going to get a zillion comments and questions but: I also signed up online recently. Where/how did you get a Certificado de Afiliación and ID number issued by IESS? Was that available online? I did not see that.

  4. The primary problem here is the belief that paying 17.6% of your retirement income for IESS health insurance is the “law”, it isn’t.

    Sine up online and your rate will be about $68 a month, period.

    1. P.S. Since there was never a law to begin with there is nothing to be “discriminatory or unconstitutional”.

    2. Article 97, Paragraph 3 of the REGLAMENTO DE ASEGURAMIENTO, RECAUDACION Y
      GESTION DE CARTERA, IESS, dated 13 Sept 2017: “En el caso de los extranjeros jubilados, la base de aportación será sobre el valor que conste en el
      certificado de la pensión que recibe de su país de origen o de la declaración efectuada en el IESS,
      que en ningún caso, podrá ser inferior al salario básico unificado fijado por el Ministerio del Trabajo.”

      1. “Article 97.-
        The amount to be paid for the voluntary IESS enrollment in Ecuador will be the monthly income that a person will state on their application, which will not be lower that the minimum wage.”

        Stated income (smile)…

        1. You have to provide certified original documentation from the SSA as part of your application for residency. You can’t just make up a number if that is what you are suggesting.

          1. That’s in applying for residency, and you can’t join IESS without a cedula anyway.

            To join online, with a cedula, you can “state” your income just as every other type of visa holder does at the minimum wage.

            1. Then you are making a decision to break the law. I don’t like the law and I think it should be challenged or changed but it is irresponsible for people to claim it is not the law.

              1. Every expat who “states” an income equal to the minimum wage is breaking the law then, not just 9-1 visa holders.

                1. That is simply not true. The law clearly states that other visa holders are enrolled at the base monthly salary.

                  1. “other visa holders” as you call them are no more accurate with their “stated” income than anybody else.

                    Unless or until I am personally notified (probably never) that I need to do otherwise I will pay the base rate also.

                    1. That is a personal decision you make knowing what the law states.

                      There is no provision in the law that requires the other visa holders to claim income other than the base monthly salary just as pension visa holders are not required to report income in excess of SS. I hope the law is eventually challenged and overturned.

            1. Again envy and greed! Wealthy are no more cheaters than those who are not. It is with their high earnings and taxes paid, their spending power, their participation in publicly funded projects those who declare them cheaters enjoy a better life. Those without substantial savings for retirement might have been victims of many factors (from having not made enough effort in younger age, but hurrying to “enjoy life” they felt entitled to; disabled; having been sick with consumerism; never living within or below their means, chain smoker’s ($6 dollars a pack!), drinkers…(Except those disabled or caring for disabled family – all those did not overworked themselves, and many always cheated, preferring being paid under the counter, much today – nothing for future or others (taxes, SS system).
              I assure everyone, from my experience with people of all walks of life during my tenure, and now, working with a charity for homeless, and less fortunate – many, too many bedestined themselves. And they are exactly those who have no respect for people and call those who had earned their wealth cheaters. Try to live on what you’ve earned and saved. Hard? I trust, you wish you knew better. Don’t pour dirt on those who did know better, and won. Enjoy the feeling of admiration, and benefit from having such people around. Just ask yourself, honestly, would you like to live with everyone around with retirement income just like yours? So – be happy, resourceful ( you have to, finally) and carry your destiny with dignity.

      2. Retirement funds are not income, they are savings. That is why it is unconstitutional and why they cannot implement it. It doesnt apply to Ecuadorians with retirement funds so why only to Gringos? Since IESS is bankrupt, it wont matter either way in a few years anyway.

        1. SS is not just savings and is even taxable in the US under certain circumstances. If you are drawing an IESS pension then you are not paying into the system any longer so there is no monthly contribution to calculate. Comparing SS to Ecuadorian retirement savings is not apples-to-apples. Your statement regarding the viability of IESS is an opinion and not fact. It is important to know the facts and then make decision. Ask any of these lawyers or other people to sign an agreement that they will cover any fines or other penalties if you violate the law and you will quickly discover what their opinion is worth .

          1. Maybe you are not aware of the state of the I.E.S.S. but it is indeed bankrupt. There are dozens of articles about this with specifics and even a video of Correa admitting taking at least 1,100,000,000.00 from the I.E.S.S. which has never been paid back. Comparing SS to Ecuadorian retirement savings is indeed apples-to-apples. It is the same system, where do you think they got it from?

            1. The IESS system is not bankrupt. It has a long-term funding deficit that is being addressed by the government, the same problem that plagues Medicare in the US. If IESS was truly bankrupt and stopped paying pensions or performing other functions there would be riots in the streets.

              Retirement savings is not the same as a pension regardless of where you are. SS is a pension plan as is the IESS pension. Retirement savings would be money that you have set aside, like in an IRA in the US or other investments. Ecuadorians on an IESS pension do not pay into the system because they have earned the 10 years of service required. Affiliates also have the same opportunity at 10 years of service and attaining the proper age. So claiming that Ecuadorians don’t pay into IESS for pension income is a moot point since they are exempt from paying any contributions to IESS upon retirement .

              1. You seem obsessed with comparing everything to the USA. For endless reasons, that does not work. IESS has a massive debt and no way to sustain its existence. The issue with USA is in no way comparable. You also want to compare rules and laws for USA SS to Ecuador IESS. Last I knew they were different countries with very different laws. Last year, around July I pointed this all out. An Attorney spent a ton of time in Quito do get clarification, and SS is NOT income. It is a retirement fund that falls into the same definition as IESS funds. Again… that is precisely why nothing is happening on this. It is unconstitutional and they cannot move forward with it. You use bogus logic. You use USA law (and even that you got wrong) and then you throw out a “sign a paper” crap for lawyers here. As if any lawyer would on any topic. It is a childish way to argue a point. It proves nothing. The very fact that nothing has happened on this in nearly a year speaks volumes.

  5. Know that anything associated with insurance is a ponzi scheme that does nothing more than take from the average man and put profits into the hands of the rich. It is designed that way.

    1. So, you can’t think of one circumstance for personal or business reasons, where one might justify buying insurance of any type, regardless of the country. 100% self-insured at all times is your motto.

  6. We canceled Bellgenica after paying for seven months. After the IESS 17.6%., Extortion… Then we told everyone we were were going to Mexico, where a Seguros Popular healthcare is free and travel insurance is $54/ea. for six months. Doctors there cost the same copay, as here. Recently someone did enroll us on online for the old price at IESS, and we continue with private labs and doctors. So we are still holding our breath. But keep plan “B”.

    1. you did notice the number of cities in Mexico with the highest murder rate in the world and that none of the Ecuadorian cities were on the list ? maybe you need more hospital care in Mexico because you get shot more often ? do they have free funerals too ? no place is perfectly safe but Ecuador is one of the safest and Cuenca is the safest larger city in Ecuador. Good luck going to a country with the lowest cost of living … it might also have the worst facilities and shortest life spans.

    2. Good for you! This proves that paying more was voluntary all along which is what I and several others tried to tell you months ago.

  7. Thank you for shedding some clarifying light on this confusing subject. I would like to know if there are age restrictions for IESS.

  8. “For the time being let’s accept that we are in uncharted waters and that
    the ebb and flow of this issue will remain with us for a while.”

    Easy for you to say. When you applied for a residency visa you knew up front health insurance was a requirement. Those of us that were already here before the new law have been blindsided.

  9. Thanks Robert. After many months of this hysteria its nice to see the voice of reason expressed in an official article not just in the comment section!

  10. Listen to all the differing opinions and chaos of thought and thinking here as people individually try to sort it out based on their beliefs.

    The best and highest ideal is to have single payer universal healthcare for all. Health being the most important thing to a life this should be the highest priority of societies….and then profiting by others heath issues has no place in society.

    1. In a perfect world that might be true. But there are many others (like me) who will argue exactly the opposite, i.e., that health care would be far more economical and efficient if government and insurance medical bureaucracies were non-existent or minimal at most.

      I would dearly love to see a world in which liberals like edgeof2 could live among those of like mind and libertarians like me could live among those of like mind in small, community-sized political units. Something like the Swiss canton system but on an even smaller scale.

      Let the experiment play out and see which society is happiest, most productive, most well-off in all aspects of life. And let people vote with their feet. I feel pretty sure which system would prove the best, but we’ll never see it in our lifetimes.

      Off to tilt at more windmills…

      1. We will see it if we decide to create it but if we convince ourselves that it is impossible then we will never see it.

      2. You are correct… and in fact you can see those examples everywhere. The disintegrating E.U. , the Nazi 3rd Reich, Stalins Russia, Cuba, Venezuela, North Korea. Even better compare countries like Colombia to Venezuela, North to South Korea, etc. It is obvious to those that want to see and accept reality and stop trying to create some fantasy world that doesnt exist, and never can.

      3. “I would dearly love to see a world in which liberals like edgeof2 could live among those of like mind” – He already does, Ecuador is a socialist country. What’s your excuse?

        1. Give me the name of a country practicing libertarian principles and I’ll be out of here faster than you can say “ObamaCare.”

          I live in a remote area of el campo where families and friends take care of each other gladly and voluntarily, not at the barrel of a gun. It’s a helluva lot closer to a libertarian paradise than anywhere I know of in the good ol’ USA.

          That’s my excuse. What’s yours, Bart?

    2. lol… you write “Listen to all the differing opinions and chaos of thought and thinking here as people individually try to sort it out based on their beliefs.” then you do just that in the rest of your post.

  11. I wonder how some of the US expats would feel if the author was an immigrant in the US and writing an article about how he deliberately broke the law in the US to game the system. Their MAGA hats would go flying in the air from their heads exploding. 🙂

  12. The govt. of Ecuador changed the insurance law with the hope that foreign residents would quit sucking up the resources created for Ecuadorian citizens. What’s worse, is that many of these immigrants are old, (needing more than average medical attention). They also have not paid their fair share into Ecuador’s healthcare system in the past.
    Now, they’re still here trying to figure ways to further cheat the system. My suggestion to that group of foreigners is to go back and try to change healthcare in your home country. Teach your children and grandchildren to save for retirement so that they don’t find themselves in your predicament.

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