Risk-Based Capital in the Brazilian Supplementary Health Market: The Influence on the Financial Performance of Health Plan Operators

Abstract

The Risk-Based Capital (RBC) model for regulatory capital composition was introduced in the Brazilian supplementary health market by the regulatory agency, National Supplementary Health Agency (ANS), on a voluntary basis in 2020 and became mandatory in 2023. This study analyzes whether the implementation of the RBC model for regulatory capital influences the profitability and capitalization of health plan operators. To this end, we analyzed the Return on Assets (ROA), Return on Equity (ROE), and Equity-to-Assets (EA) across three periods of time: previous (2018 to 2019), transitory (2020 to 2022), and subsequent (2023 to 2024). Using Wilcoxon tests with a sample of 920 operators, the results indicate lower profitability and higher capitalization after the RBC adoption. Health plan operators with higher assets experienced greater losses in ROA and ROE, while the number of small operators declined in the subsequent period. This study advances understanding of the RBC model’s effects on the health insurance market by providing post-implementation empirical evidence from the Brazilian supplementary health sector.