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The Association of Healthcare Funders of Zimbabwe (AHFoZ) is of the view that the Insurance and Pensions Commission (IPEC) Amendment Bill of 2024 will bring significant disruption which may be detrimental to the sustainability of the medical aid system.
This was in response to the announcement on the IPEC social media platform that there will be countrywide Public Hearings on the recently announced Insurance and Pensions Commission (IPEC) Amendment Bill of 2024. The Public Hearings will be hosted by the Parliamentary Portfolio Committee on Budget, Finance, and Investment Promotion from 24-28 March 2025 countrywide, according to the IPEC Facebook page.
The IPEC Bill seeks to classify Medical Aid Societies under Financial Services for Regulation under IPEC as is the case with other Insurances. This change will bring significant disruption which may be detrimental to the sustainability of the medical aid system.
Commenting on the Proposed IPEC Bill, the AHFoZ Chief Executive, Ms. Shylet Sanyanga, said “Medical Aid Societies are in the Business of Health and they focus on a Holistic approach to people’s well-being by prioritising prevention, wellness, treatment, and rehabilitation and they are run by their members.
“Typically, medical aid societies rely on member contributions whereas insurance companies have shareholders who provide capital and manage the affairs of the insurance fund. Insurance corporations are established with the primary objective of generating profits while Medical Aid Societies are predominantly non-profit entities and they are Tax exempt. The principal purpose of these societies is to facilitate the funding of private healthcare services for their members through pooling funds, as opposed to generating profit. These societies are owned by their members, and any surplus funds are typically reinvested into the society to enhance services and benefits for the members.”
She added; “The essence of these societies lies in their voluntary nature. Over-regulation by classifying them as Financial entities threatens their continuity, as restrictive regulations may lead members to opt out and collapse of the sector.”
The proposed Bill introduces regulatory oversight that may not align with the unique operational framework of Medical Aid Societies and the entire ecosystem, which includes healthcare service providers.
AHFoZ argues that subjecting these societies to the same regulatory framework as insurance entities whilst Healthcare Service Providers are under the Ministry of Health could create a mismatch and discord which could compromise health outcomes.
They said a unified regulatory authority is essential for the healthcare sector, not only for monitoring health outcomes but also for effective dispute resolution and ensuring the interests of Health Citizens are prioritised.
Among other things, the Bill mandates Medical Aid Societies to maintain an asset register and notify IPEC before selling any assets, imposing an unnecessary administrative burden.
AHFoZ notes that the punitive fines for non-compliance, potentially equating to the asset value, are excessively high and could stifle the operational efficiency of these societies and increase the costs of medical aid. Regulation under Financial services emphasizes Profit and Financial compliance. This poses a risk of insufficient coverage for healthcare needs, stringent Global limits and expensive Medical Aid contributions as the priorities will be forced to shift “from People to Profits”.
AHFoZ says the following should be noted when comparing medical aid and insurance:
- With funeral cover, there is one incident as a person dies once,
- With motor vehicle insurance, there are few incidents as people hardly get involved in Road Traffic Accidents.
- With medical aid, there are numerous incidents as people fall sick numerous
- With Medical aid, in some cases, the treatment requires extensive investigations, surgery, rehabilitation, and follow-ups, among other things.
- With Medical aid treatment might be obtained locally or outside the
Over the years, Medical Aid Societies have complimented the government in facilitating access to healthcare services, as 80% of Healthcare Service Providers’ income comes from Medical Aid societies. The collapse of this sector would impact the entire healthcare sector.
“AHFoZ has not yet been consulted and looks forward to the opportunity to give its views during a Consultation, since it is the industry to be Regulated.
“The Association of Healthcare Funders of Zimbabwe (AHFoZ) represents medical aid societies across the nation with the mission to promote sustainable healthcare funding solutions and advocate for policies that enhance the quality and accessibility of healthcare in Zimbabwe.”
