Colombian Senate is Close to Shelving Petro’s Health Reform Bill

(Bloomberg) -- A majority of lawmakers on a Colombian senate committee say they’ll vote to shelve President Gustavo Petro’s health-care bill, in a major setback for the government’s plans to overhaul the welfare state.

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Eight senators on the upper house’s social security committee said they’ll propose to archive the government-promoted plan, which would halt discussion in the 14-member body, Liberal Party Senator Miguel Ángel Pinto said on a video posted on X.

The Lower House had already approved the proposals last year.

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If the reform is killed, it would be a serious defeat for Petro’s bid to transform the nation’s economic model by giving the public sector a greater role in health and pension provision. The government would need to start from scratch by sending a new bill to congress in order to revive the project.

Petro’s bill would cut the role of private insurers as intermediaries, with the aim of allowing the government to pay care providers and medical professionals directly. A defeat in congress over health reform would cut the chances of Petro being able to pass his pension bill, which has spooked some investors.

“This is clearly a market positive development for Colombian assets,” Armando Armenta, a an emerging market strategist at AllianceBernstein said. “The fact that it didn’t even make it to the floor of the senate does not bode well for other initiatives.”

Congress is still discussing changes to the pension system, which would move the majority of workers’ contributions to the public system.

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