Balancing benefits and costs for Medical Aid Funds
Renaissance Health Principal Officer speaks about the prospects for Medical Aid Funds
Renaissance Health Principal Officer Sonja Malan says that sustainability of Medical Funds depends on ongoing evolution of Fund offerings to individual and group members.
She sketched out a scenario in which members of Funds are increasingly placed under pressure by general inflation, as well as medical inflation. This, she said, leads to difficulty for Funds when increases in medical costs require them to increase their costs.
She said that Funds accept the moral obligation to care for the health of members with various products however as Funds are mutually owned by members, the burden of members paying for the health requirements of other members, through unused portions of individual member benefits, would lead to an unfavorable assessment of value received for contributions.
However Malan also pointed out that cost-cutting and benefit reductions are not desirable as this would leave members exposed with a limiting suite of services which might not cover the needs of individuals, and might also not provide optimum revenue to medical professionals and related medical services. Cost cutting, she said, could reduce the sustainability of Funds in the long term, and deprive individuals and groups of a valuable safety net.
Members of Funds, Malan counseled, need to understand that although they may contribute less by selecting products based on savings rather than medical needs, they will run the risk of insufficient benefits if they select products based on savings rather than needs.
In light of this, Malan explained, it is vital for Funds to be innovative in providing a suite of products and benefits that optimally matches the needs of various groups of members according to their financial capability. She once again reiterated that Funds do not seek profit but are subject to the NAMFISA requirement of a reserve of 25 per cent and hence need to maintain an allocated amount of savings in order to cover the Fund’s liabilities/claims exposure. Within this framework Funds have the ability to provide the optimum benefits per product by means of risk sharing.
In addition to providing optimum benefits within different product categories, Malan said that Funds have an obligation to seek opportunities for innovation to provide for better member health.
She pointed out Renaissance Health's introduction of complementary benefits to assist members to better manage their health as a case in point. She said the suite of complementary benefits was designed to assist members to manage their health proactively. As members manage their health, the cost of the complementary benefits is offset by advances in health and incrementally lower claims on the Fund.
She highlighted the maternity benefits among the complementary benefits, saying that the ability of female members to be proactive regarding maternal health improved the health of newborns. She also said that the health of members with HIV was also provided for and prolonged with a specific benefit.
Talking about individual and family expenditure, Malan said that over-expenditure of benefits by members is a challenge faced by all Medical Aid Funds in Namibia. She said that Renaissance Health provided ongoing reminders to members to check their benefits and conserve for the event of serious needs.
She also said that when certain benefits were depleted by individual members, Renaissance Health provided members with the ability to 'top up' benefits in specific categories such as GP visits, medications, oral and ocular care with benefit builders, a unique product offering to Renaissance members.
In conclusion she stated the medical industry in both the private and public sphere face various challenges. and in promoting the long term prospect of Medical Aid Funds, co-operation among all stakeholders is a cardinal element, within the greater context of providing access to quality healthcare for the general Namibian population at large.