The crisis surrounding Muface, the mutual insurance provider for Spanish public officials, has escalated with SegurCaixa Adeslas's decision to withdraw from the bidding for the new contract to provide healthcare services from 2025 to 2027. This decision puts 1.6 million public employees on uncertain footing as they face the prospect of needing to switch providers or revert to public health services.
Adeslas cited significant financial concerns as its reason for withdrawal. The company stated the proposed new terms would result in approximately €250 million worth of losses over the three-year contract period, which mirrors the deficiencies it reported during the 2022 to 2024 period. Despite the Spanish government's efforts, which included raising the average premium by 33.5%, Adeslas deemed the current Muface model economically unsustainable after years of deficit, arguing it would jeopardize the company's solvency and future. "If maintained, it would compromise the solvency and future of the company," Adeslas reported.
The insurer's request for the contract was accompanied by demands for two-year terms with even higher cumulative premium increases of 34%. They argued for a hike of 47% for 2025 and 2026 to maintain financial balance, as they noted disparities with government proposals which suggested increases of only 26.62% for the same period. Adeslas emphasizes this gap could lead to €80 million annual shortfalls, which it cannot bear.
This abrupt withdrawal has raised alarms among public sector unions. The Central Independent and Civil Servants' Union (CSIF) quickly reacted, demanding immediate talks with the government to assess the ramifications for the public workforce. They insisted on complete disclosure of the impact reports from insurers and the AIReF (Independent Authority for Fiscal Responsibility), asserting these records must be made public without delay. CSIF declared, "The healthcare of public employees cannot depend on whether insurance companies find it profitable or not," emphasizing the necessity of government accountability.
To put this decision's significance in perspective, Adeslas is the largest of the three insurers servicing these mutuals, covering nearly 47% of the public employees. With its withdrawal, the future of healthcare for the public sector rests largely upon the shoulders of the remaining competitors, DKV and ASISA, who have yet to declare their intentions with respect to the competition announced on December 23, 2024. There remain concerns about the possible domino effect of Adeslas’s withdrawal, potentially dissuading other insurers from participating.
Meanwhile, Mónica García, the Minister of Health, reacted to the news on social media, underlining the urgency of the situation and her commitment to public healthcare. She remarked, "The healthcare of public employees cannot depend on whether some insurance companies decide if it is profitable or not. The public health system will always be there for when it’s needed, highlighting the government’s intention to secure health coverage for employees even if it means transitioning away from the mutual model.”
The bidding documents indicate the new contract aims to commence on April 1, 2025. The deadline for submitting proposals is January 15, 2025, generating unease among public officials and union representatives. The uncertainty surrounding covered professionals and their continuity of care could lead to complications, especially for those with long-term medical conditions.
While Adeslas continues to provide coverage for two other mutualities, Mugeju and ISFAS, which involve approximately 650,000 officials and their families, it has made clear the current losses from Muface's contract threaten its overall sustainability.
Looking forward, the government must navigate these treacherous waters carefully, balancing the needs of public health officials with the financial viability of the mutual insurance model. It is imperative now more than ever for both Adeslas and the remaining insurers to evaluate their participation options, upfront about how to meet the monetary needs of the citizens they serve.
With significant reforms and discussions expected, the coming weeks are bound to reveal whether Muface can adapt to the financial realities facing it or if it will lead to broader systemic changes within Spain’s public healthcare infrastructure.
