How Much Will Health Coverage Cost? Future Health Spending Scenarios in Brazil, Chile, and Mexico - Working Paper 382

As Latin American countries seek to expand the coverage and benefits provided by their health systems under a global drive for universal health coverage (UHC), decisions taken today – whether by government or individuals – will have an impact tomorrow on public spending requirements. To understand the implications of these decisions and define needed policy reforms, this paper calculates long-term projections for public spending on health in three countries, analyzing different scenarios related to population, risk factors, labor market participation, and technological growth. In addition, the paper simulates the effects of different policy options and their potential knock-on effects on health expenditure. Without reforms aimed at expanding policies and programs to prevent disease and enhancing the efficiency of health systems, we find that health spending will likely grow considerably in the not-distant future. These projected increases in health spending may not be a critical situation if revenues and productivity of other areas of the economy maintain their historical trends. However, if revenues do not continue to grow, keeping the share of GDP spent on health constant despite growing demand will certainly affect the quality of and access to health services. Long-term fiscal projections are an essential component of planning for sustainable expansions of health coverage in Latin America.