Colombian court strikes down health reform

[Judi Lynn]

Colombian court strikes down health reform
Web posted at: 4/18/2010 2:0:33
Source ::: REUTERS

BOGOTA: Colombia’s Constitutional Court yesterday struck down the government’s health reform plan, delivering the second blow this year by the judiciary against President Alvaro Uribe’s agenda.

In February the nine-judge court ruled against a plan to hold a referendum to change the constitution to allow the conservative Wall Street favorite to run for a third term. His current term ends in August. The government is expected to present bills to Congress aimed at raising taxes on alcoholic beverages, cigarettes and games of chance to make up for the loss in revenues that will eventually be caused by the court’s decision.

Recognising the dire financial situation faced by Colombia’s health system, the court said it is delaying the effect of its decision until mid-December.

“There are very serious factors affecting social security and the right to access to health services,” the court said.

Citing a “social emergency,” the government in February unilaterally raised taxes on beer, alcoholic drinks, cigarettes and gambling to raise a total of $500m through 2011 to bolster the health system and public insurance.

Some aspects of the reform, undertaken by presidential decree, sparked protests from critics who said new scheme would reduce services, especially to poorer sectors.

More:
http://www.thepeninsulaqatar.com/Display_news.asp?section=World_News&subsection=Americas&month=April2010&file=World_News201004182033.xml

[Bacchus39]

1. more info on the health care funding issue

http://www.alertnet.org/thenews/newsdesk/N18246655.htm

Colombia rushes to plug $500 mln health budget gap 18 Apr 2010 19:38:07 GMT
Source: Reuters
* Court throws out presidential healthcare funding decree

* Uribe faces battle with lawmakers to get taxes passed

* Court delivers second blow this year to Uribe's agenda

By Hugh Bronstein

BOGOTA, April 18 (Reuters) - Colombia's government will rush a tax bill to Congress this week to fill a budget hole that opened up when the Constitutional Court struck down a presidential decree aimed at funding healthcare.

The court's decision on Friday threw out Alvaro Uribe's February decree imposing a levy on alcoholic beverages, cigarettes and gambling. Money raised by these taxes was to go toward funding Colombia's cash-strapped healthcare system.

But the court decided that Uribe's emergency healthcare reform -- which would have provided $500 million through 2011 -- was not justified as an executive order and that the measure would have to be voted on by the legislature.

Recognizing the financial problems that Colombia's health system faces, the court delayed the effect of its decision until mid-December. This will allow the decreed taxes to remain in effect until then and give Congress time to pass a healthcare funding package of its own.

"The government is ready to work arm-in-arm with Congress," Uribe said over the weekend.

But it will not be easy for him to get new taxes passed.

The president's legislative clout is dwindling as he prepares to step down in August at the end of his second term. Voters will choose his successor in May's presidential election.

"Congress is distracted by the election and this is not a good time to talk about raising taxes," Santiago Castro, senior ranking member on the lower House economic affairs committee told Reuters. "It will be a difficult debate."

Other aspects of Uribe's decreed healthcare reform sparked protests from critics who said the plan would reduce services, especially to poorer sectors.

Earlier this year, the Constitutional Court struck down a plan to hold a referendum intended to enable Uribe, a Wall Street favorite popular for his U.S.-backed crackdown on leftist guerrillas, to run for a third term.

MARATHON EFFORT

Health Minister Diego Palacio said he and other government officials were working "as if in a marathon" to draw up tax legislation to be submitted to Congress on Monday or Tuesday.

"The finance ministry, health ministry and the president's legal staff will prepare the necessary bill," Palacio told reporters. "It will be marked 'urgent.'"

Finance Minister Oscar Ivan Zuluaga had predicted that an adverse court ruling would put government finances "in a difficult situation."

Over the weekend he said gamblers, smokers and drinkers would be asked to foot the bill for the increase in health insurance funding under the planned legislation.

Colombia expects economic growth of 2.5 percent this year as Latin America's No. 4 oil producer climbs back from the global doldrums of 2009. The government's high deficits are a key impediment to Colombia regaining its investment grade credit rating. (Editing by Andrew Cawthorne and Maureen Bavdek)