Posted on March 30, 2022
Caja Costs Spike for Expats in Costa Rica
CAJA sticker shock.
For those who don’t yet know, one of the requirements for residency here in Costa Rica is that you must enroll in our national healthcare system (CAJA) upon approval of your residency application. You will be means-tested to assess “fairly” what you can afford to pay—the greater your income, the higher your CAJA premium. As of March 16th of this year, the premiums took a significant hit. More on that below.
Some crucial perspectives:
Those from countries like Canada, the U.K., or the E.U. will be familiar with such public systems. And mostly unimpressed. Particularly in the U.K., these universal “free” systems are bankrupt and not functioning well for those needing care for something more than a broken wrist. If you are over age 70, you may be blocked from certain types of care no matter the urgent need. Private care remains your only option. (Henry Ford and Beaumont Hospitals in Detroit get a lot of business from cash paying Canadians unable to get served through the “free” public system across the river in Ontario.) I mention Canada because it is often held up as a glowing example of a public healthcare system. Plus, I have lived in and gained citizenship there before returning to Costa Rica.
I remain shocked at how many math-challenged Canadians think that their healthcare is free. Nothing could be further from the truth. As with all public – government-run services, it is, in fact, grossly overpriced. Costs are also primarily influenced by Big Pharma. (Another dark subject we can skip for now.)
Quick example: In London, Ontario, I accompanied my late father-in-law to a local hospital for bladder issues. During the 7 hour visit, I noticed a steady parade of sickly-looking adults and many kids coming through the emergency room doors. At the time, there was some overblown swine flu terror. Most visitors were seen, patted on the head, and assured that what they had was just flu. I observed this for hours before inquiring of the triage manager what the hospital charged the government for each of these visitors with only the flu.
“Between $800 and $1,100 each.”
So much for free.
The point I am trying to drive home here is that if you require any medical attention, one way or another, you are going to pay dearly for it. (Which is why there is much emphasis on preventive care in poor Costa Rica.) At the same time, you will also pay for others who cannot afford to pay anything. Yes, we are our brothers’ keepers and, as such, must help out in a fair and equitable manner. The strong helping the weak and vulnerable. That is the stated mandate of any public insurance system. But those public systems are the most susceptible to abuse and fraud. Why? No one sees the bill from the medical provider to the government, which makes for a massive lack of transparency and accountability.
Unlike Canada, in Costa Rica, the public and private healthcare systems operate side by side. Many ex-pats and Ticos use both. When in a hurry for things not very costly, they go to the private clinics a la carte. If they can endure the long wait times with the public system (CAJA) on more serious issues, for economic reasons, they wait it out and get their medical attention at CAJA, where for the most part, the service is still world-class.
Unfortunately, that combination of side-by-side public and private systems opens up the opportunity for some doctors to double-dip. (certainly not all) They straddle both systems, and to make a complex story short, CAJA gets abused through over-billing and illegal use of their facilities.
Delinquency in paying premiums is also a pervasive problem involving high-profile corporate entities. (And even political candidates!) The other daily drain on the system is the steady flow of Ticos with nothing more than a sniffle, headache, or hurt feelings seeking emergency attention for such trivial matters. After all, they think: It’s free, and I get personal attention sorely lacking in my life at home. I wager that if everyone had to pay just 3,500 colones (USD$5) at the triage desk, visitor traffic would be reduced by 30% or more. There are other issues and complexities, but these are the broad strokes for now.
Costa Rica is hardly unique. This is a global problem over which entire elections are won or lost.
This was all happening before March of 2020.
Then COVID hit and was accompanied by economy destroying overkill social distancing restrictions of movement. Through studies by highly credible Johns Hopkins researchers and many others, those restrictions to movement have been proven ineffective and needless. The results? Those restrictions caused the permanent shuttering of over 1,600 businesses in San Jose alone. Think of all the employees and suppliers. Then consider the tax contributions collected from all those people. The country-wide unemployment spike caused a massive drop in CAJA contributions, creating shortfalls to the system. This is despite many dire warnings from cooler heads against these overkill social distancing initiatives. They continue to wreak economic havoc here in Costa Rica and around the world. ANY kind of insurance coverage is destined to see a spike in premiums this year. As are taxes, oil & gas, food, transportation, fertilizer costs to mention just a few.
You cannot have the populace stay home and get paid with printed money to do so and not have that followed by a tidal wave of inflation. We were warned over and over. Yesterday’s highly criticized economic predictions labeled as conspiracy nonsense are now today’s realities.
So read what follows through the above perspectives.
CAJA Has Two Parts:
The CAJA system here is comprised of two elements: Healthcare coverage – and – pension contributions. Think Social Security (U.S.) or CPP (Canada.) Anyone approved for residency under the various categories must enroll in CAJA before having their residency (DIMEX) cards given to them. Up to March 15th, 2022, their enrolment was only required into the healthcare portion of the system. The pension portion was only a requirement for native Costa Ricans.
Foreigners now signing up for CAJA must participate in both parts of the system: Healthcare and Pensions.
Post-March 15th, monthly premiums for those approved as Pensioners (Pensionados) or Investors (Inversionistas) have almost doubled. While Rentista has not been mentioned in this new initiative, the CAJA staff apply the exact formulas for that category at CAJA signup. There is a constitutional law in Costa Rica that does not allow retroactive applications of these new rules. Therefore, all those previously signed up need not worry about similar rate increases. At least not yet.
For those still awaiting approvals on their Pensionado or Inversionista residency applications, count on these new premiums to apply when signing on to CAJA. Following your signup, there is a system to challenge the assessed premiums. But I am putting more faith in class action and group communications of protests rather than individual efforts unless you have deep pockets to play in court.
How much will you be assessed?
When Pensionados sign up, CAJA staff will now ask to see your proof of pension submitted to the DGME with your residency applications with which the DGME approved your applications. CAJA will use that monthly pension to calculate your monthly premiums.
For Rentista, they will use the USD 2,500/month figure on the approval Resolucións. (Based on three separate client encounters just last week.) Rentista is not mentioned in the new rule changes – yet. Count on an amendment.
I am uncertain precisely what math will be used to calculate premiums for those that qualified for Inversionista. This method may have changed with these new rules. I will cover that in more detail in a subsequent article, and by that time, I also hope to have official clarity on Rentista registrations.
*So that you know what to expect, refer to this latest chart used by CAJA in the attached Image*
1) Pensionado with USD $1,500/month income:
(1,500 x 6.24%) + (1,500 x 7.24%) = $201 Monthly CAJA Premium.
2) Rentista with USD $2,500/month income:
(2,500 x 8.2%) + (2,500 x 7.65%) = $396 Monthly CAJA premium.
I do not yet have clarity on one other question: What is the age break – if any – on someone who gets the CAJA pension premiums added to the mix? IE: If I am a Pensionado aged 60 – 65 – 70+, and I pay into the CAJA pension system, at what age can I expect to start collecting my benefits? (It may be that I overlooked the answer in the voluminous 112 page PDF announcement from last September in La Gaceta. I’ll keep investigating this week.)
This all comes as a severe jolt to many who budgeted for lower monthly premiums. I know there will be massive blowback on this issue from many quarters. My constructive suggestion is that the ex-pat community form groups and send professionally and rationally written letters and emails of protest to their respective embassies to leverage the impact of such protests. Don’t leave it to someone else. Fight requires effort.
Also, here is the contact information to the “complaint department” at the ICT (Costa Rica Tourism Board):
Email – [email protected]
Be sure all such communications to her are officially translated into Costa Rica Spanish by an official translator. (Not abysmal Google translate). In the meantime, we will endeavor to get more meaningful information to guide all applicants through this situation to affect a fair outcome for all concerned.
There may also be more help on the way to reverse or adjust these rates by the new government to be sworn in after the April 3 runoff election. Though still not impressed with either choice, I have switched my allegiance based on stated intentions by one of the candidates/parties currently leading in the polls. Make much noise about this issue in public forums, Embassies, and to the ICT, so the pressure builds on the politicians and bureaucrats responsible for this poorly thought out change to the system. (Hopefully many will be replaced with new blood not part of the good ole’ boys club.)
Comparatively, even with all its flaws and problems, the Costa Rican healthcare system still offers better value for the healthcare premium dollar when compared accurately to other countries. Also of significant consideration: The unique healthy environment of Costa Rica and abundant, economical field-to-table fresh produce available year-round remains one of the main benefits of living here. I have lost count of how many clients have told me of dramatic improvements to their health and reductions in prescriptions in just their first year of living here. This lessens the need to access CAJA. Let’s not lose sight of what remains of significant benefit.
And no matter what happens in the future, one thing will never occur in Costa Rica: