The Sunday Mail
Darlington Musarurwa Business Editor
AS the Insurance and Pension Commission angles to control the US$1,2 billion medical aid and insurance business, medical practitioners last week said the obtaining regulatory framework was untenable.
Presently, the medical insurance business through provisions of the Medical Services Act is regulated directly by the Health and Child Care Ministry, which the industry claims lacks capacity to enforce discipline in the sector.
Last week, Zimbabwe Medical Association secretary-general Dr Shingi Bopoto told The Sunday Mail Business that according to international best practices, medical insurance should fall under an authority like Ipec.
For the past three years, Zima has been pushing for either one of two options: a separate regulatory authority for medical insurance, or regulation by Ipec.
Government seems to have opted for the former.
The Medical Aid Regulatory Authority Board could be appointed this year if Parliament passes the enabling law as recommended by the Health Ministry.
“But this will create another cost centre for a Government that is already financially strained,” said Dr Bopoto.
“It is easier for the business to be regulated by Ipec because it is already on the ground. If, however, Government is so intent having a regulatory board, in the interim they should just let Ipec regulate the sector as Parliamentary processes might take time,” he said.
The Association of Healthcare Funders of Zimbabwe was non-committal last week, with CEO Mrs Shylet Sanyanga referring all questions to Government.
Flashpoint
In the current regulatory environment where some medical aid companies are not settling claims within stipulated times, hospitals are also getting the short end of the stick.
By end of last year, Zimabwe’s three major health institutions — Harare, Parirenyatwa and United Bulawayo hospitals were owed about US$10 million in unsettled claims.
Since there are no minimum capital requirements in the medical aid business, the sector is open to weak participants.
Some sector players, it is claimed, are breaking the law with impunity; and allegations of corporate governance breaches abound.
The biggest flashpoint is the two-year-old tiff between Cimas, the country’s second-biggest medical aid provider, and Corporate 24, a private health services firm.
Cimas medical aid card holders seeking Corporate 24 services have to pay cash and claim reimbursements, which is in direct contravention of the law. Just as Cimas subscribers are complaining, Corporate 24 also says it is losing a lot of business.
Ipec says it has the ability to regulate such issues.
“Establishing a separate medical aid regulator requires funding in terms of start-up costs including recruitment of staff, buying or leasing offices and other administrative costs, which may put pressure on the fiscus unnecessarily,” said Ipec commissioner Mr Tendai Karonga recently.
“Ipec’s strict conditions in the licensing of medical aid societies just like other insurers will contribute to efficiency and stability in the medical aid sector as fly-by night medical aid societies will not operate in Zimbabwe.
“This helps protect the interests of medical aid members who for too long have borne the brunt of unscrupulous medical aid societies,” he said.
Ipec presently regulates 88 companies. Total gross written premium for the sector, which measures the amount of business being generated by the industry, stood at US$581 million at December 31, 2016.
The regulator also intimated recently that the Act of Parliament that gave rise to the Commission, the Insurance and Pension Commission expressly put medical insurance under Ipec’s purview.
Ipec said, “It is evident that medical aid societies offer insurance service to their members who transfer the risk of personally paying for their medical bills to the health care insurer by paying premiums.
“However, we are engaging authorities to explain our position that we are legally mandated and have the capacity to regulate medical insurance for the benefit of policyholders, service providers and ensuring that the industry grows.
“There is need to avoid fragmentation in regulation because the negative effects of that are costs and variations in standards, which could prejudice taxpayers and members of these medical aid organisations.”
Regional practice
The current regulatory framework, where medical aid societies and medical insurance are superintended by a different authority to the one that oversees the insurance industry is markedly different from regional best practice.
South Africa’s Financial Service Board, which regulates some aspects of medical aid, is taking over all regulatory functions.
In Botswana the Non-Bank Financial Institutions Regulatory Authority regulates medical aid schemes; so, too, does the Financial Institutions Supervisory Authority in Namibia.
For Swaziland, the Financial Services Regulatory Authority is responsible for the industry. It is the same practice in East African countries such as Kenya, Tanzania and Uganda.
Neighbouring Zambia is also moving in the same direction as the Pension and Insurance Authority is engaging authorities to takeover medical aid schemes.
