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close this bookThe Nutrition and Health Transition of Democratic Costa Rica (INFDC, 1995, 228 p.)
close this folder2. Development of the social security institute
View the document(introduction...)
View the documentBackground
View the documentSocial security in Costa Rica
View the documentThe extension of direct insurance
View the documentExtension of insurance to the family
View the documentThe financial crisis
View the documentThe constitutional amendment
View the documentToward universalization
View the documentDevelopment of human resources
View the documentThe integration
View the documentThe new health care models
View the documentFinal comments

The extension of direct insurance

To understand the process of the extension of the Illness and Maternity law, it is important to understand two factors that were important determinants. The first was the growth of the population, and the second was the behavior of the government with regard to its financial obligations with the Institute.

Population growth has occurred at a very fast pace in Costa Rica during the second half of the century. This phenomenon coincided with the birch of the Social Security Institute, even though the two processes were not related. During the so-called period of demographic explosion, Costa Rica experienced one of the highest rates of population growth, and by 1942 it had the highest birth rate in the world. In 1942, when the first seeps coward the creation of the Social Security Institute were being taken, the total population was less than 650,000. However, this figure began to double every 20 years, and during the 50 years of existence of the Institute, the population has increased fivefold and, by 1991, consisted of more than 3,100,000 people.

The ocher issue was the behavior of the government as a financial contributor to the Institute, It is known that delayed payments from government have been a major problem for most of the Social Security Institutes in Latin America. Although Costa Rica is no exception to this, it is important to recognize that most administrations have cried to correct this problem. The 100,000 colones that the government offered as seed capital for the Institute was not received in cash, but the government compensated by facilitating the importing of materials for the construction of the Central Hospital. The obstacles posed by World War II made it necessary to rely on the collaboration of the government to facilitate these acquisitions. Nevertheless, a debt accumulated, which was paid by the Junta Fundadora. (The Junta Fundadora of the Second Republic governed for 18 months starting in April 1948.) However, the problem did not disappear, and the debt began to grow again until 1957, when the Figueres administration made the first payment arrangement, but did not pay the entire debt.

The financial changes introduced by the Echandi administration in 1958 partially improved the situation. It consolidated the direct financial system of the Institute through specific taxes that were received directly by the Institute. In spite of this effort, the debt continued to grow. When this financing mechanism disappeared with the creation of the Treasury Department, part of the government payments depended on the budget and expenditures approved as the National Budget.

When the Institute began its coverage, it lacked both an infrastructure of its own and support from public opinion. The figures presented in Figure 1 clearly show that during the first 12 years of operation, the Institute served only daily wage earners. During this period, the population that was served increased sixfold but only reached 24% of the economically active population. Since dependents were not included, the coverage of the total population remained constant at 7%.