Mexican Health Insurance Premiums Could Rise Up to 18% Under New Tax Reform

Cancún, Mexico — A recent tax reform applying value-added tax (VAT) to insurance premiums could drive up the cost of major medical insurance in Mexico by as much as 18% this year, according to a local industry expert.

Jorge Daniel Pech Mas, former president and current member of the Mexican Association of Insurance and Bonding Agents (AMASFAC) in Cancún, announced the projection. He said insurance companies have not yet officially published new price tables, but adjustments are expected to exceed increases seen in recent years.

Previously, premiums rose between 12% and 17%, driven primarily by factors like the insured person’s age, medical history, and coverage level. The addition of VAT could make these adjustments even more significant.

Pech Mas explained that the economic impact on users will vary based on their risk profile and policy type. However, he estimated increases could translate to additional payments ranging from 3,000 pesos to over 10,000 pesos annually, especially for comprehensive coverage or policies for older individuals.

Traditionally, insurers announce official rate changes during the first quarter. A clearer picture of the reform’s real effect on final costs for policyholders should emerge between February and March.

Pech Mas also emphasized the need to promote greater insurance culture in Mexico, noting the country lags behind similar economies in insurance penetration. This low coverage leaves a large segment of the population vulnerable to unexpected events that can cause severe financial strain.

Under this scenario, he considered it essential for Mexican families to have at least basic insurance like auto, health, and life coverage. These instruments help mitigate the economic impact of accidents, illnesses, or deaths, which can seriously compromise family assets.

Finally, he stressed that financial planning through insurance not only provides immediate protection but also strengthens long-term economic stability at both family and social levels by reducing the financial burden of unforeseen events and fostering greater foresight among the population.