(qCOSTARICA BLOGS) The CAJA, or Caja Costarricense de Seguro Social, as it is more correctly and formally referred to, is probably the most powerful Government institution in Costa Rica, along with the Tax Department (Ministerio de Hacienda and Tributacion).

Essentially, these two institutions have the power to “declare you guilty until you prove yourself innocent”, the reverse of most Democratic institutions and the notion of the Rule of Law. Wielding such power, why is the CAJA always being operated at a deficit? They have been known to have forced many small businesses to close and lay-off workers, based on trumped-up claims against the business owner for specious back payments for employee pay-roll deductions, which the owner is forced to defend against, or pay, with excessive interest and penalty charges added on.

The CAJA, of course, is charged with among other things, such as payment of worker and disability pensions, administering the Government socialized Medical System.

Being from Canada, I’m very familiar with the universal socialized Government Medical System in place there. The Canadian Medical System is likewise in financial difficulty, providing a much poorer quality of service today, than it did many years ago when I lived there. Many Canadians, who have the economic means, are now forced to go to the U.S., or other jurisdictions, to pay for life-saving medical services that they would wait months to receive in Canada.

This is, of course, exactly what is happening in Costa Rica as well with the CAJA Medical System, forcing those that can afford doctors in private practice and private medical clinics to pursue that option. The recently publicly exposed back-log of patients for relatively routine, but life-saving medical procedures, by a CAJA doctor working in the Cardiology Department of Hospital Mexico, is a good example of such.
What both the CAJA and the Canadian socialized medical systems have in common, is that there is no deductible, or user fee amount which must be paid by users for the receipt of medical services.

Accordingly, there is a considerably high level of abuse by users in both Systems. The elderly abuse the Systems by utilizing valuable doctor-time to combat loneliness, when such could be more efficiently and economically handled by Government Social Workers. In Costa Rica, where even prescription meds are included in the insured amount, vast quantities of non-required prescriptions are filled on a daily basis.

In my opinion, these abuses could be effectively cured by having a small user fee/deductible amount charged to all medical system users at the time of utilizing any such insured service provided. The amount of the deductible portion would not have to be large, as the requirement of “digging-into-your-pocket” to pay any amount, would make users think twice about their true requirement to avail themselves of any particular medical service that they are seeking.

If this practice of charging a user fee were implemented, I believe that the current level of abuse of medical services could be greatly curtailed, with no denial of access for such medical services for legitimate users, and with the benefit of moving toward “balancing the books” at the CAJA.

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Richard Philps

Attorney Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. Rick practiced law in Victoria, B.C., Canada as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998. Rick then earned his Bachelor of Laws and Licensing Degrees (Civil Law), with Honours, and a Post-Graduate Degree in Notary and Registry Law, from the Metropolitana Castro Carazo and Escuela Libre de Derecho Universities, in San Jose.

Rick is a member of the Costa Rica College of Lawyers, and practices law in Costa Rica in the areas of real estate and development, corporate, commercial, contract, immigration, and banking with the Law Firm of Petersen & Philps, located in Escazu, a western suburb of San Jose.

To contact Attorney Rick Philps about hiring him as your Costa Rican Attorney, please use the following information: Lic. Rick Philps – Attorney at Law, Petersen & Philps, San Jose, Costa Rica Tel: 506-2288-4381, Ext. 102; Email: rick@costaricacanadalaw.com Website: www.costaricacanadalaw.com

  • Fishrman

    Very valid points. And how about those of us who are forced to pay into the system when we will probably never use the system? Can we get a rebate or refund for the monies paid into a system we don’t use? Maybe, if after your death, they would total up what you paid into the system and refund you what you have not used? For example, say you paid 5,000,000,000 colones into CAJA over the course of your life and did not ever use the CAJA medical system, I believe you should receive a refund of the money you were forced to pay into the system. Of course, those monies would be paid to your heirs, if any, and if none, the CAJA keeps the money.

    Yes, they are basically creating a two tier system with the poor people utilizing CAJA and those better off or who can’t afford to wait using private sector services while also paying for a service they will most likely never utilize. From what I understand, France has probably the best social medicine system, and I think should be looked at by Costa Rica and perhaps the U.S. as a basis for reforming or improving the current medical system.

    • costarick

      As a person holding Residency status in Costa Rica and being forced to pay into the CAJA for the Government Medical Insurance, there is no way out, except to become a Naturalized Costa Rican, or leave. The payment for the Insurance in Residency status constitutes nothing more than a tax. The Government doesn’t care if you ever avail your self of the medical insurance coverage through using services covered; in fact, they hope that you don’t. The CAJA medical insurance payments are just more general revenue for the Government to squander.

      • Ken Morris

        Are you sure that Caja payments go into general revenues (for the government to squander)? I can’t find verification for this, but in general taxes in Costa Rica are earmarked for specific things and my impression is that the Caja is a fairly autonomous entity. In fact, I think it’s the reverse. Periodically the government has to transfer funds from general revenues into the Caja to keep it (marginally) solvent.

        And yes, “payment for the Insurance in Residency status constitutes nothing more than a tax.” You have a problem with this? It’s a tax that provides 100% medical coverage for the residents for a very low price.

        While I hate to argue by anecdote, I personally know one of your countrymen who receives hundreds of dollars of medical services from the Caja every month (oxygen, insulin, zillions of bills, constant appointments) in exchange for paying a monthly Caja “tax” of around $60 CAD. To my mind, the Caja is squandering a lot of money providing free medical services for old expats and not charging them a high enough “tax.”

    • Ken Morris

      I’m afraid you misunderstand insurance, public or private.

      The whole idea is that by everybody paying a little bit, the pool of money is large enough to provide the services only a few will require but could never afford on their own. Most people in an insurance pool will never and should never spend through the entire amount they contributed. This though doesn’t mean that they have taken a loss–much less are entitled to a refund–since by being in the insurance pool they have the right to have a lot more money on their healthcare than they contributed.

      If people were given refunds for the unspent portion of their contributions, the system would no longer function as insurance and nobody would be covered for expensive medical costs.

      So you actually don’t want a refund, since if you were to get one you wouldn’t have insurance in the first place.

      Many people, especially the healthy, the wealthy, and those with other health coverage in addition to the Caja, insist that they will never use the system and therefore shouldn’t have to pay into it. Most of them are probably right about never using the Caja, but all of them aren’t. Even healthy people are blindsided by accidents and illnesses they didn’t expect, and some of these people end up in the Caja. Wealthy and insured people also do after their medical bills climb too high. I know two doctors in Costa Rica who have private health insurance policies for themselves, as well as a good bit of money, and both consider the Caja a crucial backup for themselves personally. One pointed out that the private hospitals lack the specialists on staff that could be needed in case of a serious problem, and therefore insists upon being taken to a public Caja hospital in the event of a serious problem. The other notes that some costly ailments, chiefly cancer, will cost more than his private insurance policy will cover, so he will have to end up on the Caja, and concedes that even less costly ailments will drive his private insurance premiums too high and force him into the Caja anyway.

      So yes, it is a two-tiered system, and with this there are a lot of problems. However, all systems (including France’s) are two-tiered too, and there are advantages to that. Basically, if some people only use the Caja as a backup, but still pay their tax, this enables the Caja to have more money to treat the people who do use it while also providing the others with the backup they need.

      Of course, an issue remains tax fairness. IMO, the Caja makes a mistake by not capping the premiums on the wealthy. I think that instead of continuing to tax at a percentage of income into infinity, it would be wiser to expect everyone to pay the full amount that the coverage can be calculated to cost and then provide tax-subsidized reductions for those with lower incomes. I can’t say what the value of Caja medical coverage would be on the private market, but going from the premiums private insurers charge I would guess it would be less than $300 a month, probably more like $150 – $200. I think where the Caja goes wrong is in overcharging the wealthy. This just encouages them to cheat while making them angry.

      But yeah, people who don’t plan on using the Caja should still pay into it and never receive a refund, because in fact they may use it. The issue is charging them the fair amount. Maybe those with private insurance policies covering in Costa Rica deserve a discount from the Caja. I can’t say what exactly is fair, only that it’s not fair for some people to pay nothing.

      • Fishrman

        Ken, I totally understand the concept of insurance, both private and public, but I don’t like being forced to pay for anything. I believe that I should have a choice on how I choose to spend MY money. It is money I have earned and paid taxes on (which I also believe are unfair), then I am also forced to pay taxes on stuff I buy to survive and things that I may never use. I do hope that I never have to use the public system for health care as we have all read and heard of the stories of neglect and unbelievable lack of care. I agree that health care is a basic human need and there should be a better system so that those who need it can have access to decent care at a reasonable cost. How this is achieved is a matter for debate.

  • dr meno

    So that they have to barrow more money from the criminal banisters and go more in debt so that the banks will repossess the CAJA then raise th erases and seall all of your pensions. ALSO the Big Corp Pharmas have probably bribed the minister of health to get Ticos addicted on their product.

  • Ken Morris

    Do you have any evidence for your assertions that the elderly waste the Caja doctors’ time simply because they’re lonely or that the doctors prescribe medicines that aren’t medically necessary?

    No doubt a few old folks do pay bus or cab fare to line up at 5 AM to get an appointment, and then pay bus or cab fare to return to the appointment with nothing much wrong with them besides loneliness. No doubt Caja docs also occasionally make the mistake of prescribing medicines unnecessarily. However, it defies common sense to believe that either of these problems is widespread. More importantly, since research is undertaken to evaluate the effectiveness of the Caja and to my knowledge the researchers have not identified either problem, I’m inclined to doubt that either problem exists in any major way.

    By contrast, the failure of businesses, independent professionals (like lawyers), and even government agencies to pay their Caja taxes has been documented time and again. Worse, it’s even been documented that some businesses deduct the employees’ portion of the Caja tax from their paychecks and pocket the money themselves. Worse yet, after the mean tax collectors from the Caja finally clamp down on the businesses in arrears on their taxes, the Caja usually allow the businesses to negotiate a payment for a lesser amount than owed. Thus, the businesses and professionals who cheat the Caja are rewarded with a lower tax bill than those who don’t.

    It’s no secret why the Caja is broke: Rampant tax cheating.

    If someone wants to institute a small user fee for the Caja, I’m not going to object. However, I’m pretty sure that this is a cure for a disease that doesn’t exist.

    • costarick

      Yes, I do have evidence of CAJA users being addicted to anti-depressants, through over, or unnecessary prescription in the CAJA medical system. I’m not limiting my complaint of abuse to the elderly for abuse of prescription drugs, only the aspect of relief from loneliness. I’m saying that over prescribing drugs applies to all age groups. I believe that this abuse could be greatly curtailed by instating the small user fee that I’m suggesting.
      Another unrelated abuse and waste of money by the CAJA, is the over-stocking of prescription drugs. A couple of years ago, I watched a news-clip on a local TV station, that showed expired drugs being loaded into dump trucks by a front-end loader in a CAJA warehouse, to be taken to the dump.

      • Ken Morris

        Medical opinion is divided over whether addiction to antidepressants is even possible, with the current consensus that antdepressants aren’t addictive. It’s tough to fault Caja docs for prescribing these medicines when the state of the medical arts directs them too, even if it may turn out that patients do become addicted and the prescriptions were a mistake.

        We’re on the same page about any mismanagement in the Caja, including over-stocking drugs and having to throw them out. I suspect this happens to private pharmacies sometimes too, but probably more often in a giant public system managed by bureaucrats. It’s the kind of mistake that the news should report and managers should be held accountable for.

  • Rico

    Seniors in Costa Rica do not pay bus fare. The “Cuidadano de oro” card avialable from the Caja at 65 years of age, allows many benefits, discounts at many retail stores, ie. pharmacies, shoe stores, etc., never have to stand in line for anything and free bus rides. Costa Ricans take this card very seriously.

    • Ken Morris

      Yeah, they also get to cut in line at the banks–but I don’t see many hanging around the banks to socialize with the tellers because they are lonely.