NBFIRA: Half of medical aids defaulted in 2017
Pauline Dikuelo | Friday January 26, 2018 17:00
“This reflects a serious challenge when reporting about the sector, as the authority has to exercise oversight over the financial soundness of medical schemes to ensure the protection of the members,” NBFIRA said in its recently released 2017 Annual Report.
Under NBFIRA regulations, medical aid schemes are required to submit audited financials to the authority no later than four months following their year-ends.
Last year the Authority suspended a number of medical aid schemes including Itekanele, Symphony, Botsogo and Botlhe medical aids for various violations of the NBFIRA regulations, including the failure to submit the audited financial statements.
The suspensions drew criticism from some commentators who argued that the Authority was unnecessarily taking a hard-line against budding citizen-run medical aids, instead of guiding them to remedy their faults.
The Authority has since lifted the temporary closures of Itekanele, Botsogo and Botlhe, while it has appointed a curator for Symphony.
“The authority has employed the corrective measures to ensure all medical aids comply with the requirements as stipulated in the exemption letters,” NBFIRA’s market intelligence researchers wrote in the Annual Report.
The medical aid sector also recorded a high number of complaints during the year, mainly around the repudiation of claims.
NBFIRA’s social media pages, in particular, were inundated with complaints from medical aid clients who said their claims had not been settled, leading to healthcare providers slapping them directly with bills.
The Authority said other complaints were due to lack of understanding of product offering together with lack of robust and effective complaints’ resolution process by regulated entities.
“There is still need for stakeholder education on medical aids, and insurance products,” NBFIRA researchers noted.
In recent years, the local medical aid market has shown signs of saturation, with the 10 operational schemes competing aggressively in an increasingly tighter market.
Analysts have said low growth in employment numbers and stagnant incomes are weighing negatively against the medical aid schemes, with many employees viewing medical insurance as a luxury.
The situation has resulted in some new schemes offering clients unsustainably attractive products and services, leading to financial stress for the schemes.
Last year, the principal membership of medical aid schemes was largely flat at 150,997 from 150,278 reported in 2016.
This is despite the fact that a new medical aid scheme was registered during the year.
Available data also shows that only 37% of formally employed people have medical aid, when the latest total formal employment figures of 404,556 are used.
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