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THE Association of Healthcare Funders of Zimbabwe (AHFoZ) has expressed reservations about the proposed Insurance and Pensions Commission (IPEC) Amendment Bill of 2024 which it says will disadvantage healthcare seekers.

IPEC publicised on its social media platforms that the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion will conduct public hearings on the Insurance and Pensions Commission Amendment Bill in major parts of the country starting this Monday 24 March.

The first meeting will be in Gweru on Monday followed by the Bulawayo meeting the next day on 25 March while Harare and Bindura will be the last on 28 March after Masvingo and Mutare during the week.

In a statement, AHFoZ said it had noted with concern that there will be countrywide Public Hearings on the Amendment Bill which it says seeks to classify Medical Aid Societies under financial services for regulation under IPEC as is the case with other insurances.

The Public Hearings will be hosted by the Parliamentary Portfolio Committee on Budget, Finance, and investment Promotion from 24-28 March 2025 countrywide.

AHFoZ said it was concerned that the change will bring significant disruption which may be detrimental to the sustainability of the medical aid system.

“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,” said AHFoZ Chief Executive, Ms Shylet Sanyanga.

She said the essence of Medical Aid Societies lies in their voluntary nature.

She said 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.

Ms Sanyanga said 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.

“Subjecting these societies to the same regulatory framework as insurance entities whilst Healthcare Service Providers are under Ministry of Health and Child Care could create a mismatch and discord which could compromise health outcomes.

“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 the Health Citizen are prioritised,” she said.

Ms Sanyanga said among other things, the Bill mandates Medical Aid Societies to maintain an asset register and notify IPEC prior to selling any assets, imposing an unnecessary administrative burden. 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 costs of medical aid, she added.

“Regulation under Financial services puts emphasis on 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”,” bemoaned Ms Sanyanga.

She said when comparing medical aid and insurance, there is a need to note that 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 while with medical aid, there are numerous incidents as people fall sick numerous times and in some cases the treatment requires extensive investigations, surgery, rehabilitation and follow-ups, among other things.

Medical aid treatment might be obtained locally or outside the country.

Ms Sanyanga said Medical Aid Societies have over the years complimented the Government in facilitating access to healthcare services, with 80 percent of Healthcare Service Providers’ income coming from Medical Aid societies.

The collapse of this sector would impact on the entire healthcare sector, she said.

Ms Sanyanga said AHFoZ has not yet been consulted on the issue.

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