The Medical Aid Society of Malawi (Masm) says the short-term solutions that the society has taken, though seemingly tough on its members,have been made to ensure the sustainability of the medical aid service in the long-term.
Last month, the country’s dominant provider of health insurance, raised its monthly premium (subscriptions fees) by 25 percent.
Following the hike, Masm members under Very Important Persons (VIP) scheme contribution has gone up from K16 800 to K21 000, Executive scheme went up from K9 000 to K11 250 and Econo-plan scheme is up from K3 000 to K3 750. Those on Executive Old (EXO) scheme will pay monthly subscriptions of K21 000 from K16 800 whereas those on VIP Old (VIO) saw price go up from K22 200 to K27 750.
This is the second time in six months that Masm has raised the premiums for its packages.
Despite raising premium prices last year, Masm reported a K1 billion loss, for the period between January and June.
The situation forced the society to, among others, roll out shortfalls and classify hospitals where members can access help.
However, the development has irked members and consumers rights body Consumers Association of Malawi (Cama), describing the adjustment as unfair.
But Masm chief commercial officer Andrew Ngomwa said in an interview at a meeting with members on Wednesday, after serious reflection and observation on the claiming patterns of its members the firm had no choice but to effect the price adjustment.
According to Ngomwa, if the society had managed to maintain a loss ratio of not more than 80 percent in 2017, it would have posted a net surplus of K29 million against a deficit of K2 billion, and post a surplus of K211 million in 2018 against a deficit of K1 billion.
“For any business operating in the way we are, it cannot sustain itself for a long period and can only close. But as a society we were able to operate and pay claims because of the reserves that we built over the years and have managed to cushion the claims but if it was pure trading then we would have shut down,” he said.
One of the members who attended the meeting Dalitso Ngwalo noted that Masm was quick to introduce the no shortfall approach when they did not have full consideration of the effects.
He said: “It was premature for them to take away the shortfall. Instead of being proactive now they are reactive. We know they have their strategic plan but we believe this needs more advance planning and forecasting on what things are going to be out of every decision they make.”
Another member Heggar Mkandawire said members are anticipating the increment to bring about change in service provision.
“Maybe Masm has a point in taking the step it has but what we are saying is that we do not want our families sent back home due to unpaid fees to hospitals,” he said.