Institutionalising Health Accounts in Brazil

3. Overview of the Brazilian health system

Abstract

The organisation of the Brazilian health system is complex under the joint responsibility of the federation, the states and the municipalities for the public sector, while at the same time the private sector also plays a significant role. This chapter provides a brief introduction to the Brazilian health system to better understand the health accounting approach taken and discussed in the next chapter. It highlights the organisation and management of the Unified Health System or Sistema Único de Saúde (SUS) and its complex financing arrangements. It also emphasises the key role of private health insurance in Brazil, through which around a quarter of the population obtain access to healthcare despite being also entitled to public services under SUS.

3.1. The introduction of SUS has increased access to health services for large parts of the population

With over 212 million inhabitants, Brazil is by far the most populated country in Latin America, as well as being the largest in geographical terms. Brazil is a federative republic, with the federal government, the states (and the federal district), and the municipalities all playing important roles in governing and administering the country, including in the area of healthcare.

The current principles and structure of Brazil’s health system are based on the 1988 Federal Constitution which established health as a universal right for the entire population and as a responsibility of the state. The enactment of laws 8080 and 8142 led to the establishment of the Unified Health System (Sistema Único de Saúde or “SUS”) in 1990. The key principles of SUS as laid out in Articles 196 to 198 of the constitution are universality, comprehensiveness, decentralisation and social participation. While equity itself is not explicitly in the terms of the legislation establishing SUS, the 1988 Federal Constitution does refer to “equal access”.1 Based on these principles, everyone in Brazil is entitled to comprehensive health services provided under SUS regardless of the ability to pay. The federation, the 26 states (plus the federal district) and the 5 570 municipalities have shared responsibilities for the financing and management of SUS and the delivery of public services.

Services financed by SUS are delivered by a wide mix of private and public providers. In primary care, services are predominantly provided by publicly employed staff working in multi-disciplinary primary care teams. Outpatient specialist care is available in public clinics or hospital outpatient departments. Inpatient services are provided by public hospitals, but private hospitals are also contracted by municipalities or states to provide services under SUS.

The scope of health services offered under SUS is comprehensive without cost-sharing for patients but there may still be out-of-pocket payments for some prescribed pharmaceuticals in specific programmes, i.e. the Popular Pharmacy (Farmácia Popular) programme as well as for any other goods and services not included in the benefit package or obtained from providers outside the SUS network. Yet, while the entire population is entitled to receive services under the SUS, a non-negligible part of the population struggles with unmet health needs, in particular for pharmaceuticals (Coube et al., 2023[1]). Thus, while the introduction of SUS has led to significant increases in coverage and access to healthcare services improving health outcomes, SUS is also facing many challenges, for example, in the provision of timely access to specialised care (Castro et al., 2019[2]).

3.2. SUS financing is complex

As set out in the Federal Constitution of 1988, health is a responsibility of the state and services provided under the SUS are financed collectively by the federation, the states, municipalities and other sources. However, since its inception, the financing of SUS was contested and a number of legal changes and constitutional amendments attempted to make the financing less volatile. The Constitutional Amendment 29 of 2000 identified minimum “floors” for the federation, the states and the municipalities for the financing of SUS. According to the CA29, the federation should dedicate at least its 1999 spending value increased by 5% in 2000, and after that annually adjusted with nominal GDP growth. The states and municipalities should dedicate at least 12% and 15%, respectively, out of their own revenues (including transfers from other federated entities) to health. In 2012, Complementary Law 141 further defined the scope of activity to which the minimum spending requirements should be applicable: The “public health actions and services” (“ações e serviços públicos de saúde”- ASPS) which are composed of 13 areas such as health surveillance, universal health cover or training of the health workforce for SUS.

The Constitutional Amendment 86 of 2015 changed the financing obligations of the federation again. Investment floors were tied to the Federal Current Net Revenues (RCL). The percentage of RCL allocated to health was supposed to gradually increase from 13.2% in 2016 to reach 15% in 2020. However, Constitutional Amendment 95 in 2016 introduced further changes due to fiscal pressures and generally froze primary federal expenditure until 2036. For health spending, the stipulations from CA95 meant moving the 15% minimum allocation from RCL forward to 2017 but pegging future annual increases of this minimum floor to inflation until 2036. In late 2022, CA95 was revoked by Constitutional Amendment 126/2022 and complementary Law 200/2023 re‑established the 15% minimum floor for the federation.2

Overall, the frequent changes in the financing mechanism have led to a greater involvement of the states and municipalities in the financing of SUS over time. Between 1995 and 2015, the share of municipalities increased from 19% to 31% and the states’ share from 18% to 26%. Consequently, the proportion of SUS funded from the federation decreased from 63% to 43% (Mendes and Rózsa Funcia, 2016[3]).

While the financing of SUS is mixed across the three levels of government, most of healthcare is organised at the state and municipal level, where managers oversee public health facilities but also purchase services from non-public providers. For this reason, approximately 80% of the federal funds are transferred to states and municipalities through the National Health Fund (FNS). Hence, states and municipalities manage the allocation of both their own resources and funds transferred from other administrative levels (Ministério da Saúde, Fiocruz, 2018[4]). The FNS processes the transfer of resources, organised into financing blocks that group actions with similar purposes and destinations. The amount allocated for each action is determined based on agreed-upon budgetary financial limits and the qualification of federal entities to execute the Ministry of Health’s programmes. The FNS is the financial manager of resources allocated to finance both current and capital expenditures of the Ministry of Health, as well as agencies and entities under direct and indirect administration that are part of SUS (Ministério da Saúde, 2025[5]).

To address the issue of segmentation, since 2007 the federal transfers are clustered into six main financing blocks with complex allocation rules (Moreira dos Santos and Rocha de Luiz, 2016[6]):

1. Primary care:3

a. Fixed basic care floor component (Fixed PAB)

b. Variable primary care floor component (Variable PAB)

2. Outpatient medium and high complexity care and hospitals:

a. Financial limit component of medium and high complexity ambulatory and hospital component (MAC)

b. Strategic actions and compensation fund component (FAEC)

3. Health surveillance

4. Pharmaceutical assistance:

a. Basic component of pharmaceutical assistance (CBAF)

b. Pharmaceutical assistance strategic component (CESAF)

c. Specialised components of pharmaceutical assistance (CEAF)

5. SUS management

6. Investment

3.3. Private health insurance plays a significant role in Brazil

Despite the fact that the entire population is entitled to services under SUS, nearly a quarter of the population have private health insurance coverage. Typically, private health insurance in Brazil is “duplicate” in the sense that the benefits covered are already included in the SUS benefit package, but the insurance allows for access to almost all (or most) private health providers in Brazil.4 Private health insurance predates the establishment of SUS, and the federal constitution of 1988 guarantees that private health insurance coverage can supplement automatic coverage under SUS.

In 2023, around 26% of Brazilians were covered by voluntary medical insurance (“Assistência Médica”) to mainly duplicate healthcare coverage under the SUS (ANS, 2024[7]) and regulated by the “Agência Nacional de Saúde Suplementar” (ANS). An additional 16% had voluntary coverage exclusively for dental care (ANS, 2024[7]). While the proportion of the population with private medical insurance coverage is roughly on the same level than a decade earlier, it increased strongly in the case of dental coverage. Together more than 900 entities and insurers offer medical or dental coverage (ANS, 2024[8]). When it comes to medical insurance, there is a wide variety in the scope of services covered by the individual plans and in the legal modalities of the entities covering these services. Most cover ambulatory and hospital care but not pharmaceuticals or highly specialised treatment.

Most health plans are employer-based group policies as a component of employment contracts where contributions are paid by employers, but other individual or collective policies are also available. People with private coverage usually access private health providers including for profit and not-for-profit hospitals.

The nature of private health insurance in Brazil is unusual in an international context. While in many OECD countries, a higher proportion of the population have private insurance coverage, this typically refers to complementary or supplementary insurance. Private insurance to duplicate public coverage exists in a number of other OECD countries with a tax-funded “National Health Service” (such as in the United Kingdom, Ireland, New Zealand, Italy or Portugal), but in these countries people tend to utilise public services in general and only occasionally use their private insurance, for example to obtain quicker access to certain diagnostics or specialist services. In Brazil, people with private insurance coverage tend to forgo their entitlement to healthcare under SUS nearly entirely and instead resort to their private coverage. The importance of private insurance can be explained, to some extent, by the rationing of service provision in the public sector resulting in the relatively high per capita expenditure of enrolees in private plans and insurance.

References

[8] ANS (2024), Dados Gerais - Operadoras com beneficiários (Brasil - 2013-2024), https://www.ans.gov.br/perfil-do-setor/dados-gerais (accessed on 19 March 2025).

[7] ANS (2024), Dados Gerais - Taxa de cobertura (%) por planos privados de saúde (Brasil - 2013-2024), https://www.ans.gov.br/perfil-do-setor/dados-gerais (accessed on 19 March 2025).

[2] Castro, M. et al. (2019), “Brazil’s unified health system: the first 30 years and prospects for the future”, The Lancet, Vol. 394, pp. 345–56, https://doi.org/10.1016/S0140-6736(19)31243-7.

[1] Coube, M. et al. (2023), “Inequalities in unmet need for health care services and medications in Brazil: a decomposition analysis”, The Lancet Regional Health - Americas, Vol. 19/March, https://doi.org/10.1016/j.lana.2022.100426.

[3] Marques, R., S. Piola and A. Carrillo Roa (eds.) (2016), O SUS e seu financiamento, Associação Brasileira de Economia da Saúde, https://bvsms.saude.gov.br/bvs/publicacoes/sistema_saude_brasil_organizacao_financiamento.pdf.

[6] Marques, R., S. Piola and A. Carrillo Roa (eds.) (2016), Transferências federais no financiamento da descentralização, Associação Brasileira de Economia da Saúde, https://bvsms.saude.gov.br/bvs/publicacoes/sistema_saude_brasil_organizacao_financiamento.pdf.

[5] Ministério da Saúde (2025), Sobre o FNS, https://portalfns.saude.gov.br/sobre-o-fns/.

[4] Ministério da Saúde, Fiocruz (2018), Contas do SUS na perspectiva da contabilidade internacional: Brasil, 2010-2014, Ministério da Saúde; Fiocruz, https://bvsms.saude.gov.br/bvs/publicacoes/contas_SUS_perspectiva_contabilidade_internacional_2010_2014.pdf.

[9] OECD (2022), Private health insurance spending, OECD Publishing, Paris, https://www.oecd.org/en/publications/private-health-insurance-spending_4985356e-en.html.

Notes

← 1.  Art. 196: “Health is a right of all and a duty of the State and shall be guaranteed by means of social and economic policies aimed at reducing the risk of illness and other hazards and at the universal and equal access (“acesso universal eigualitário”) to actions and services for its promotion, protection and recovery”.

← 2.  In 2020-2021, CA95 was suspended temporarily due to the health emergency of the COVID-19 pandemic to allow the growth in ASPS expenditure.

← 3.  The financing of Atenção Básica (Primary Health Care) changed in 2019 from the previous fixed and variable components with the introduction of the “Previne Brasil” Programme (Portaria nº 2.979, de 12 de novembro de 2019), https://www.gov.br/saude/pt-br/composicao/saps/previne-brasil.

← 4.  The typology of private health insurance used at the OECD distinguishes between a “primary” and “secondary” role. In some OECD countries, private health insurance is the primary mechanism through which the entire population or some parts of the population obtain healthcare coverage (e.g. Switzerland, Germany or Chile). Private health insurance can also play a secondary role by providing: “supplementary” coverage, for those services not included in the public benefit package (in Israel or Canada, for example); “complementary coverage”, covering co-payments needed to use services included in the public benefit package (e.g. France); or “duplicate” coverage, for services delivered by providers not included in the public benefit package, to obtain faster access or increase the choice of providers (e.g. Australia, Ireland) (OECD, 2022[9])