Balancing benefits and costs for medical aid funds

Renaissance Health’s principal officer, Sonja Malan, says that sustainability of medical funds depends on ongoing evolution of offerings to individual and group members.
She sketched a scenario in which fund members are increasingly placed under pressure by general inflation, as well as medical inflation. This, she says, leads to difficulty for funds when increases in medical costs require them to increase their costs.
She says that funds accept the moral obligation to care for their members’ health with various products, but since funds are mutually owned by members, the burden of members paying for the health requirements of other through unused portions of individual benefits, leads to an unfavorable assessment of value received for contributions.
She pointed out that cost-cutting and benefit reductions are not desirable since this leaves members exposed to a limiting suite of services which may not cover individuals’ needs, and might also not provide optimum revenue to medical professionals and related medical services. Cost cutting, she says, could reduce the sustainability of funds in the long term, and deprive members of a valuable safety net.
Fund members need to understand that although they may contribute less by choosing products based on savings rather than medical needs, they may run the risk of insufficient benefits if they select products based on savings rather than needs.
In light of this, Malan says it is vital for funds to be innovative in providing a host of products and benefits that optimally matches members’ needs according to their financial capability. She reiterated that funds do not seek profit but are subject to the Namfisa requirement of a reserve of 25 per cent and thus need to maintain an allocated saving 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 says that funds have an obligation to seek opportunities for innovation to provide for better member health.
She points to Renaissance Health's introduction of complementary benefits to assist members in better managing their health. She said these benefits were designed to assist members in managing their health proactively. As members manage their health, the cost of complementary benefits is offset by advances in health and incrementally lower claims.
She highlights the maternity benefits amongst the complementary benefits, saying that the ability of female members to be proactive regarding maternal health, improves the health of newborns. She adds that the health of members with HIV was also provided for and prolonged with a specific benefit.
Regarding individual and family expenditure, Malan says that over-expenditure of benefits by members is a challenge faced by all medical aid funds, but that Renaissance Health provides ongoing reminders to members to check their benefits and save for the event of serious needs.
When certain benefits are depleted by individual members, Renaissance Health provides 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 Malan says the medical industry in both the private and public sphere face various challenges, and in promoting the long term prospect of funds, cooperation among all stakeholders is essential to provide access to quality healthcare for the Namibian population at large.