Medical Aid Society of Malawi (Masm) has raised its monthly subscriptions by 25 percent as the “no shortfall policy” takes its toll on the society.
However, two economists have differed on the merit for the hike.
While Catholic University head of economics department Gilbert Kachamba described it as “too much and unjustifiable”, CDH Investment Bank (CDHIB) managing director Misheck Esau argued the hike is not surprising.
Earlier this year, Masm introduced a “no shortfall policy” which has seen its members no longer paying a shortfall to the service providers.
But in a circular to all members dated July 12 2017, Masm chief executive officer Sydney Chikoti explains that since the introduction of the new policy, a large number of its members have moved from their traditional service providers such as Christian Health Association of Malawi (Cham) facilities or nominated general practitioners where the society has favourable negotiated tariffs to more expensive private hospitals and facilities.
Six months after the “no shortfall policy” was introduced, Masm thinks this direction is crippling its financial resources and has opted to transfer the burden to its members who, from September 1 this year, will be paying more in monthly subscription fees.
But in an interview, Kachamba described the hike as unjustifiable and believed Masm would not make another adjustment in the near future looking at the two adjustments already made this year.
“As of now, we are talking about a 25 percent increment which is just too much and unjustifiable,” he said.
But Esau said the “no shortfall” policy required deep pockets which Masm did not have.
“In fact, some of us as policymakers were fearing for the total collapse of the umbrella medical aid schemes like Masm,” he said, stressing that it was obvious Masm was heading for trouble; hence, being at loggerheads with some hospitals.
“If Masm does not invest in modern technology and systems to curb fraudulent claims by members which have drained its resource base over the years, the increase will continue in the foreseeable future. The “no shortfall” policy, is definitely going to be a tough one for them. It is a very expensive strategy,” he said.
Chikoti could not be reached for a fresh interview over the weekend, but in the letter he said the revision of the package brought over some unexpected behavioural shifts and actions from members which are impacting Masm.
“The revision of the benefit package at the beginning of 2017 has brought tremendous pressure to the resources and sustainability of the society. As you are aware, decisions to go the “no shortfall” way was a result of member expectations from a survey that had been conducted,” reads the letter in part.
Chikoti said during the first half of the year, claims are far exceeding the contributions being collected on month-to-month, impacting on the society’s ability to settle claims arising from the service providers in a timely manner.
In an interview, one of Masm member in Lilongwe called for a removal of the “no shortfall policy” other than raising the contributions because people will be paying a lot.
Another Masm member commenting through the social media said Masm rushed into making the “no shortfall” decision without considering the challenges that will follow, especially after its implementation on their expenditure.
Following the hike, VIP members will be making a monthly contribution in the range of K21 000 from K16 800, executive members will have to part with K11 250 from K8 400 while Econo-plan scheme members will be paying K3 750 from K3 000.
Those on Exo scheme will now be paying monthly subscriptions K21 000 from K16 800 while those on VIO scheme will have to part with K27 750 from K22 200.