(Bloomberg) -- President Gustavo Petro’s government has started asserting control over one of Colombia’s biggest private insurers as his attempt to overhaul the health system bogs down in Congress.

The South American nation’s health superintendent said Tuesday it will intervene in EPS Sanitas, which has 5.7 million users and is part of health group Keralty SAS.

With his push to transform Colombia’s conservative economic model facing increasing resistance from lawmakers and institutions, the move represents a tactical escalation by the leftist leader.  

Petro’s officials, including Health Minister Guillermo Alonso Jaramillo, have repeatedly said some insurance companies don’t meet financial reserve requirements and therefore the government must step in. The president, in a post on social media platform X after the announcement, said the government has “an obligation to save the healthcare system.” 

The industry, meanwhile, has warned that delays in payments and insufficient government transfers have been drowning private insurers in debt and putting their financial viability at risk. 

Luis Carlos Leal, head of the watchdog agency, said in a video posted on X that the “administrative intervention” will last for a year given the lack of compliance with financial requirements, among other reasons, and that the government isn’t liquidating the insurer.

“Services will continue without any inconvenience,” Jaramillo said in a livestreamed video, standing alongside Leal, asking users to remain calm. “We will make sure that affiliates can still use the insurer’s services.”

The main shareholder in EPS Sanitas is Spanish multimillionaire Joseba Grajales. Representatives for Sanitas didn’t immediately reply for a request for comment.

Speaking from Congress, opposition senator Miguel Uribe said the government’s decision to step in Sanitas is a retaliatory move after lawmakers failed to approve the government’s plan for healthcare reform. Petro has sought to slash the role of private insurers as intermediaries, with the aim of allowing the government to pay care providers and medical professionals directly.

The government “is taking revenge on an EPS that it had been systematically pursuing,” opposition lawmaker Andres Forero said. “The sad thing is that those who are going to be affected are” the patients, he added.

--With assistance from Nicolle Yapur.

(Updates with Petro and ministerial comment beginning in 4th paragraph.)

©2024 Bloomberg L.P.