Masm should give customers options


Effective September 1 the Medical Aid Society of Malawi (Masm), the country’s dominant provider of health insurance, has raised its monthly premium (subscriptions fees) by 25 percent.

Following the hike, Masm members on Very Important Persons (VIP)  members contribution has gone up from K16 800 to K21 000, Executive scheme K9 000 to K11 250 and Econo-plan scheme from K3 000 to K3 750. Those on Executive Old (EXO) scheme will pay monthly subscriptions K21 000 from K16 800 whereas those on VIP Old (VIO) from K22 200 to K27 750.

This is the second time in six months that Masm has raised the premiums for its packages.

In justifying the pending raise, Masm argues that the “no shortfall” offer to members introduced earlier this year has had an impact on its finances.

In the words of Masm chief executive officer Sydney Chikoti, members’ expectations are very high on “no shortfall” package; hence, the society seeks to match expenditure to contributions.

Said Chikoti: “The revision of the benefit package at the beginning of the year 2017 has brought tremendous pressure to the resources and sustainability of the society. As you are aware, decisions to go the ‘no short fall way’ was a result of member expectations from a survey that had been conducted.”

Masm argues that it took the “no shortfall way” based on member suggestions through a survey, but I still feel, at the end of the day, the society should have balanced the findings and the reality on the ground. In that regard, Masm would have spared itself from the situation it has found itself in.

My suggestion would be for Masm to avoid “one-size-fit-all” policies and start giving members a wide choice on its product offering. Giving members a choice would entail Masm having varied premiums and benefits for a scheme. For example, with the Executive scheme pegged at K11 250, Masm should be flexible as to have other members paying the old/current premium but with prescribed shortfalls and then give members the option of paying the higher subscription with shortfalls. The same arrangement can be offered across all other schemes.

Worth understanding is that Masm is not a profit-making organisation. When it was founded in 1984, it was established as a mutual society, meaning an organisation owned by members and managed for their benefit in pursuit of a common cause which, in the case of Masm, is provision of health insurance to members (the owners). Thus, mutual society shareholders are their members who are also the customers.

Mutual societies differ from insurance which is a cover for an eventuality. Health insurance operates more or less along the same lines, though, as it covers members’ medical bills and until recently, in the case of Masm, funeral expenses.

The last time I checked the mandate of Masm, it remained (and still remains) a mutual society. However, technically, I note that Masm is now emphasising on profit-making and not serving members. Nowadays, it has become a tradition or the norm for Masm to raise premiums paid by members every New Year’s Day.

Masm should avoid passing the cost of its poor decision-making and inefficiencies to its members.

I feel if Masm stuck to its core business of providing health insurance, surely, members or its owners would not be paying the current rates of premiums. However, Masm chose to diversify its services, opened clinics, thereby employing more staff and increasing its operating or overhead costs. Today, Masm members’ premiums seem to go more towards paying the huge staff compliment than the service they expect to get.

Have you ever wondered why short-term insurance companies such as Nico General Insurance Company, UGI and Reunion Insurance Company do not own motor vehicle garages?

Initially, Masm Medi-Clinics, as the clinics are called, used to provide good service, but with time, service delivery has deteriorated.

In the past, Masm used to send claim statements to its members. In this era of information and communications technology (ICT) that should be easy to sustain than it was the case over 10 years ago.

In motor vehicle insurance contracts, providers offer “no-claim-bonus” incentives to those who either do not make a claim or do not go beyond a stated threshold. The other day I suggested that Masm could be innovative and offer a similar service where members who make no claim are exempted from a premium hike or indeed given any other form of incentive. n


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