Government announces 12.94% UPC increase for 2026 following court mandates

Following Constitutional Court orders, including contempt proceedings against Health Minister Guillermo Alfonso Jaramillo for prior UPC shortfalls, the Colombian government set the Unidad de Pago por Capitación (UPC) increase at 12.94% for 2026, applicable to contributory and subsidized health regimes. This adjustment raises the assurance budget from $89.8 trillion to over $101.3 trillion, aiming to close regime gaps.

The Ministry of Health and Social Protection announced the UPC for 2026, corresponding to a 12.94% increase, based on a technical study with input from the Advisory Commission on Benefits, Costs, and Health Assurance Rates. This builds on gap closure efforts equating subsidized regime resources to 95% of contributory ones, per prior Constitutional Court directives like Auto 007, which criticized 2024/2025 adjustments and prompted investigations into the Health Minister.

The hike adds $11.6 trillion to the health system, lifting the assurance budget from $89.8 trillion in 2025 to over $101.3 trillion in 2026. The Commission recommended 9.03% for the contributory regime and 16.49% for subsidized, with extras for geographic dispersion (11.47%), cities (15%), San Andrés premium, and indigenous groups.

Goals include closing regime disparities, meeting court requirements, and updating technical costs. The Ministry emphasized directing resources to hospitals and clinics beyond EPS, with strict oversight, transparency, and efficient use.

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Dramatic illustration of Chamber of Deputies approving public sector 3.4% salary bill, rejecting tie-down norms, and dispatching to Senate amid opposition funding concerns.
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Chamber dispatches public sector salary adjustment to Senate rejecting tie-down norms

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The Chamber of Deputies approved and dispatched the public sector readjustment bill to the Senate, including a gradual 3.4% salary increase. However, it rejected the controversial 'tie-down norms' pushed by the government, which plans to reintroduce them in the Upper House. Opposition lawmakers criticized the lack of clear funding for part of the fiscal cost.

The Constitutional Court ordered the Attorney General's Office to investigate Health Minister Guillermo Alfonso Jaramillo for failing to comply with the order to adjust the UPC for 2024 and 2025. The court declared the 5.3% increase for 2025 insufficient and opened a contempt proceeding. Experts estimate a $10.3 trillion deficit in the health system.

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Colombia's Senate Seventh Commission archived the health reform bill with eight votes in favor and five against, on the last day of the ordinary legislative session. This marks the second sinking of the initiative pushed by President Gustavo Petro's government. Reactions highlight concerns over the system's financial sustainability.

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The Spanish government and unions UGT and CSIF have reached an agreement to raise salaries for 3.5 million public employees by 11% from 2025 to 2028. This increase, including a variable component tied to inflation, aims to recover lost purchasing power. CCOO has not yet signed but is expected to decide soon.

Colombia's Banco de la República raised its intervention rate by 100 basis points to 10.25%—the highest in over a year—in its first 2026 board meeting, citing persistent inflation above 5% for nearly six months and unanchored expectations from a 23.8% minimum wage hike decreed by President Petro's government. The decision, with a split 4-2-1 vote, drew market surprise and government criticism over economic contraction risks.

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In the latest on Chile's record 129-article Public Sector Readjustment Law, submitted last week, Congress approved 36 articles on Wednesday despite backlash over 100+ miscellaneous add-ons. Labor Minister Boccardo defends the measures as essential updates, while critics decry the 'denatured omnibus' bill lacking funding clarity. Average 2.8% salary hike carries US$1.7 billion cost.

 

 

 

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