BOGOTA (Reuters) - Colombia's health sector could see costs grow by 929 billion pesos ($234.7 million) in 2024 if the government's proposed health reform is approved by Congress, the finance ministry said on Wednesday.
Health sector expenses could hit 92.3 trillion pesos ($23.3 billion) next year if the controversial bill is approved, versus an expected 91.3 trillion pesos if the reform is blocked.
The health reform is one of a series of proposals pushed by the government of President Gustavo Petro, which looks to reduce poverty and inequality in Latin America's fourth-largest economy.
The reform would result in higher costs in the short and medium term, the Ministry of Finance said, citing the expansion of primary care, training healthcare workers, and strengthening hospital infrastructure, among others measures.
"In the long term, it's expected that emphasis on prevention will translate into lower costs for care of medium and high-complexity (illnesses)," the ministry added.
The health reform would also drive expansion of Colombia's healthcare deficit to 3.2 trillion pesos in 2024, which is forecast at 2.3 trillion pesos if the bill is not passed, the ministry said.
Analysts expressed concern about the duration of cost increases stemming from the health bill and how they would impact public finances.
"If the deficit widened by 3 trillion pesos, it could cause long-term fiscal accounts and long-term sustainability to be more affected than if it were a one-time event," said Sergio Olarte, Scotiabank's chief economist for Colombia.
While spending during the first years following the reform would be higher "that situation would reverse starting in 2036," the ministry said.
Petro's reforms have been criticized by lawmakers and disagreements over them has fractured the president's majority coalition, making any approval uncertain.