Social protection in Mexico: great opportunities and a new big challenge ahead

Mexico has undertaken major reforms over the past two decades that created and consolidated social protection programs benefiting a large part of the population.

The conditional cash transfer program “Oportunidades”, one of the first in the region, seeks to stop poverty from being transmitted from generation to generation. It gives cash to poor, selected, families on the condition that their children go to school and to regular health visits.

The program benefits about 5.7 million families so far. 1.7 million people in Mexico escaped extreme poverty thanks to Oportunidades and an alimentation support program, of which 1.2 million live in rural areas, according to 2010 numbers from CONEVAL.

Oportunidades is a well-recognized model for this type of programs, and many countries are interested in knowing how it works.

About 51.8 million people are covered by the “Seguro Popular”, the public health insurance that includes informal workers in Mexico – a newer program compared to Oportunidades and one of the largest programs of its kind in the world. With the Seguro Popular, 25% less money was spent on health services by the patients themselves.  There were 15% fewer cases of people falling into poverty because they had to pay for a major health treatment.

And there are many smaller social protection programs that increased the quality of life of Mexicans – but there is still room for improvement, World Bank analysis shows. Coverage gaps concern the elderly and the youth, but also people that face crises in their family or communities – like unemployment or losses after a natural disaster, for example.

According to analysis done by the World Bank, much progress has been made to make these programs more efficient, but there is still work ahead to improve the services for those most in need.

Opportunities: More efficiency and coordination

Mexico should move towards a tightened, efficient and coordinated system that addresses the problems of those most in need. It cannot depend only on single programs working along side each other, as it creates inefficiencies and coverage gaps.

In 2011, administration and insurance costs accounted for an estimated 10.8% of total health expenditure – the highest rate in the OECD, the Organization for Economic Co-operation and Development with 34 member States.
Services still vary: for example, beneficiaries from the income security program for older people “70 y más” (70 and more) can receive 500 pesos a month, while those receiving  retirement (Régimen de Jubilaciones y Pensiones) can receive 17.500 pesos a month.

Employment services also still present gaps in coverage. For example, only about 37% of Mexican workers contributed to the pension system in 2010, below the regional average.  And an unemployment insurance system is notably absent.

To fill these coverage gaps and continue the strengthening and coordination of these programs that have already benefited many people, further reforms would be needed, according to a World Bank analysis.

Such reforms could include a unified register of beneficiaries across programs, linking together the different health systems in the country, coordinating better between different programs, and creating new programs to address the needs of currently uncovered populations.

The World Bank stands ready to support the government of Mexico to take on these challenges, with a full package of services, including knowledge , convening and financial services, that are tailored to the needs and context of the country.