Medical Aid Society of Malawi (Masm)—the country’s biggest health insurance scheme by membership—and its subsidiaries has incurred a net loss of K587 million against the previous year’s surplus of K455 million.
Masm subsidiaries and joint venture investments—Masm Medi Clinics Limited and Mwaiwathu Private Hospital—reported a net loss of K159 million, according to Masm 2016 financial report presented at the 33rd Annual General Meeting in Mzuzu on Friday.
The society, on the other hand, reported a net deficit of K428 million against the previous year’s net surplus of K475 million.
In his presentation, Masm board chairperson Masauko Katsala, who is a manager at National Bank of Malawi, said the unsatisfactory performance was largely due to increases in claim costs and claim numbers.
He said claim numbers grew by 33 percent from 2015 to 2016. Comparatively, during the same period, he said contributions revenue increased by 20 percent.
The growth in contribution revenue received during the year was K10.9 billion (2015: K9.1 billion) compared to K9.4 billion (2015: K7.1 billion) settled as claims.
Membership as at end of 2016 stood at 123 063, slightly down from 123 278 in 2015.
Said Katsala: “The 2016 macroeconomic environment in which the society operated was very challenging as it was characterised by high inflation and interest rates.
“The withholding of donor support towards the national budget and the increase in food prices due to the reduction in maize production resulted in people’s low disposable incomes.”
In an interview later, Masm chief executive officer Sydney Chikoti said the society is contemplating on reviewing contribution rates as a solution to correct the situation.
He said the society will also address issues of fraud perpetrated by members and hospitals.
Masm member Catherine Chinula said if contribution rates are increased, members will expect the benefits to be commensurate with the reviewed fees. n