QUESTIONS AND ANSWERS
Here you will find questions with subsequent answers that were posed to the Fund, its actuaries, and administrator at the Annual General Meeting.
1. I am a principal member, and I have the following suggestion: if a member gets diagnosed with a chronic illness, for example, in my case, kidney failure, and I go for dialysis, and I need medication every month. However, my medical aid option has a limited amount; I can’t afford the next operation for my fistula, I can no longer afford medication prescribed by the doctor, benefits to see a GP and specialist DR are depleted, and at any point now benefits will deplete soon which will mean I will not afford dialysis anymore. My suggestion is, if a patient finds themselves in a situation like mine, there should be an exception to change to a higher medical aid option, please.
The sustainability of the medical aid fund is structured around the principle of cross-subsidisation and risk pooling, whereby a lower claimer at one stage cross-subsidises the high claims and, during their sickly stages, also being cross-subsidised by the healthier members at that stage. Medical Aid Funds do not allow upgrades and downgrades during the year due to the high risk of anti-selection. Members may select the benefit options based on their short-term health profile instead of an uncertain future event. This implies that the higher options will usually consist of members who upgraded due to specific conditions, defeating the risk pooling principle.
2. We have an issue with travel assistance funding which currently only applies when one is referred to Windhoek. We kindly request that this be rolled out to the entire country, as specialists are located all over the country. We’re not asking for an increase in funds but rather the qualification for assistance even when referred to private hospitals in Ongwediva or Ondangwa.
Extracts from the Rule below and the NMC Travel Policy are as follows:
3.18.3. OTHER TRANSPORT
Subject to the annual sub-benefit limit in paragraph 3.18 and further limited to N$10,150 per family per annum. Limited to 80% of the cost. Subject to prior approval and Travelling Expenses Reimbursement Policy of the FUND.
Extract from the NMC Travel Policy
3. Travel Expenses Reimbursement Fee for consultations, examinations or procedures within Namibia:
3.1. The maximum reimbursement fee for travelling expenses either by own private vehicle, by air or by bus is N$10 150 per family per annum.
3.2. Visits, consultations, treatment (first and any subsequent visits, consultations and treatment for the same condition):
3.2.1. When using own private vehicle, round trip distance at N$4.00 per kilometre based on the shortest distance travelled up to a maximum of 80%;
3.2.2. When travelling by air, return trip maximum of 80% of the actual airline cost;
3.2.3. When travelling by bus, return trip maximum of 80% of the actual bus ticket
3. Why can’t we also get the extra benefit of our dependents who do need glasses? I need special glasses for far and near sight, resulting in significant out-of-pocket expenses while the benefits of my dependents are lapsing. I wish you guys can change this benefit like NHP. I also would like our over-the-counter medicine to be increased a little bit more if possible. I am a long-time member of NMC and do not see much difference in benefits over my course of being a member. Kindly take this into mind when we have the Zoom meeting and give feedback, because it is like you have to go to a higher option just not to pay that extra lot of money for glasses.
The matter will be placed on the benefit design committee agenda for consideration.
1. I would like to know the difference between the annual day-to-day benefits (Fam) and the annual day-to-day benefits DEP00? Opal.
The day-to-day benefit for the family on the Opal option is N$25,100 and N$18,550 per beneficiary. This means that each member has a benefit of N$18,550, but it is limited to N$25,100 if there are two or more people in the family. Please note that there is a limit per benefit for example General Practitioners and Specialists are limited to N$6,200 per family.
2. I would like to know the difference between the claimed amount and the tariff amount?
The claimed amount is what the health professional – doctor/facility/hospital/pharmacy etc. is charging for a specific service or medication. The tariff amount is what the medical aid fund covers, which is based on the Namibia Medical Aid Fund, NAMAF, benchmark tariffs. The Fund mostly pays according to the NAMAF tariffs. These tariffs are calculated based on what it would cost a health professional to render the service, as well as their respective expertise. However, the health professional has the right to set their own claim amount. The difference between the claimed amount and the tariff amount is usually what the member needs to pay out of their pocket.
3. If the COVID-19 vaccine was free, why was it deducted from the benefits?
No member paid/will pay for the vaccine, and the Fund will not deduct the cost from the members' day-to-day benefits. The amount on members' statements is purely for auditing purposes and data collection.
The industry, including all Medical Aid Funds, met with the Ministry of Health and Social Services, MoHSS, to discuss the vaccination drive. After that, the NMC Board of Trustees agreed to pay N$731 for each vaccinated NMC member as part of its social responsibility to financially assist the government in rolling out the vaccination campaign to reduce COVID-19-related deaths countrywide.
Please note that the N$713 is not for the vaccine itself but for administering it – the funds go towards maintaining the cold chain, transporting the vaccine to outlying areas, and additional staff, including consumables.
4. Does the Fund pay for Covid tests for those who have been in contact, is a referral from a practitioner required?
When COVID-19 was rife, particularly during the first and third waves, the demand for testing was extremely high. Members were very worried—some wanted tests only as a precaution. Due to long queues and extensive backlogs at Pathology labs, the Fund required a referral from a Medical practitioner before paying for a test. Since then, the massive backlog and demands have subsided; therefore, the Fund no longer requires a referral.
The Fund does not pay for required tests when members want to travel.
When Covid started, NAMAF created a tariff code specific for the COVID-19 test, charged at N$1,513.60. The Fund paid N$850.00 per test.
In September 2021, The Methealth Administrator approached Pathcare on behalf of the Fund regarding the high cost and received the following correspondence:
“Pathcare Namibia is now in a position to lower the price for routine Covid-19 PCR to N$750. This will benefit all hospital patients, pre-admission testing, contact tracing and persons under investigation.
The urgent Covid-19 PCR test remains available at N$1200 (lowered from N$1554). Travellers will have the same choice regarding Covid-19 PCR testing (NS750 or N$1200).”
5. As a member of NMC, I can’t agree with the way in which this important event is taken away from the members by holding an electronic meeting which denies a great number of members the right to vote or partake as they either are not literate in electronic or do not even own a computer or a phone that allows them to partake, which is not fair to them. Medical aid is a large amount on their budget, but they have no say in any decision. Please bring it to the attention of management.
The COVID -19 pandemic presented a challenge in holding face-to-face AGMs for the past two years, so the Fund was left with no other option but to look for alternative ways to hold its AGM. It is necessary to mention that since hosting the AGMs online, the number of attendees has increased significantly.
For the 2023 AGM, the NMC office will propose Trustees consider both options to allow for both physical and online attendance. As the NMC office, we invite you to attend this year’s AGM from our offices.
1. Can NMC kindly review the orthodontics once off benefit amount? The current amounts are not in line with what is charged in the market and the benefit amount sometimes does not cover even half of the orthodontics amounts. Basic orthodontics quote is about N$30,000 and above, and benefit amount on Sapphire is N$22,000 and on Ruby a mere N$12,000, which does not even cover a third of the amounts for orthodontics treatment.
The overall dentistry benefit and orthodontic benefit offering for NMC is fairly competitive and comparable to other Medical Aid Funds in the industry. NMC will investigate the orthodontics cost and consider amendments to the benefit if necessary for the 2022 benefit review.
2. Can NMC kindly consider refunding a specific % to members that are contributing without being hospitalised?
In most cases, members have no control over the hospitalisation, except for some elective procedures and procedures that can be done in doctor’s room. A member with no hospital cost in one year could possibly have very high hospital costs in another year. It is therefore a threat to the sustainability of the Fund to accord refunds to members who did not incur hospital costs in one benefit year. NMC is, however, exploring possibilities of rewarding members based on their utilisation of the day-to-day benefits.
3. I am happy with many benefits offered by NMC, however, my concern or rather my proposal is on the optics and self-medication (over the counter medication). NMC also has many limitations on medications and restrictions on how much one spends per month or per day. I propose the following on Sapphire:
3.1. Optics to be N$10,000 per family per year considering that one claims only after every two years.
NMC Benefit design committee is working on a similar proposal for restructuring the optical benefit for the 2022 benefit year. It is, however, important to note that the increase in benefit may have a cost implication that could result in an additional increase in contributions. The Board of Trustees in consultation with the Actuary of the Fund will decide on the reasonable optical benefit limits that are beneficial to members and sustainable by the Fund.
3.2. Self-medication to be increased to N$2,000 per member and a yearly allocation of at least N$10,000 on medication that is restricted and to be divided by months.
NMC acknowledges the need of self-medication in managing minor illnesses. Self-medication is, however, also associated with risks such as misdiagnosis, use of excessive drug dosage, prolonged duration of use, etc. The self-medication limit is therefore set at a lower limit to minimise the risks highlighted.
No questions raised.
1. Can NMC increase the Clinical Psychology benefit and increase the auxiliary benefit so that the increase in Clinical Psychology benefit will not deplete other auxiliary benefits?
NMC offers a fairly competitive benefit for Clinical Psychology and overall auxiliary benefit, in comparison to its peers. The benefit limits are aimed to protect the Fund against very high and unnecessary claims. NMC aims to have the members affected by the limits as few as possible, and therefore perform analysis regularly on the number of members that reach the limits and by adjusting most limits annually. NMC will conduct an analysis on the number of members that reached the limit for the Clinical Psychology benefit to determine whether to determine the reasonable adjustment to the limit for the 2020 benefit year.
2. Can NMC consider increasing Chronic medication benefit?
The chronic benefit is one of the groups of benefits that enjoy a great deal of attention every year. NMC tries to balance the level of benefit provided to members with the cost of providing these benefits. If the benefit limits are made significantly higher, then the contribution for all the members will increase by a higher percentage to allow for the additional cost. The increases for chronic medicine should therefore be carefully considered.
3. Can NMC revisit the Savings Plan Option?
As per the directive by NAMFISA the Savings Plan option on the day-to-day medical expenses for the two new generation options (Amber and Emerald) has been removed with effect from 1 January 2018. The Trustees are currently looking into alternative possibilities as we understand the value of a savings facility. The alternative designs will aim to be similar to the savings option; however it will comply with the Regulators’ requirement. NMC has already submitted an alternative design which was also declined.
The alternative option if approved by NAMFISA will be included in the benefit design for 2020.
4. Can NMC look into restructuring medical aid benefits such that people pay for the benefits they are using?
The core principle in the functioning and sustainability of the medical aid scheme is the cross-subsidisation. This means that all members of the scheme contribute to their respective benefit option based on their age or income, irrespective of whether they are healthier or sickly. Benefits are there for paid out to those who need them, as per the benefit limits set in the Rules.
In a situation where members can choose to only contribute towards the benefits that they use, then the principle of cross-subsidisation and pooling will be lost, and each member will effectively end up funding their own benefits.
The benefit structure for each option is designed such that the premiums collected from the members of the option sufficiently covers for the benefit payments required. Effectively, young and healthy people cross subsidise elderly and sick people. If all the members in one option are in a single risk pool, then the average contributions can be as low or as high as possible for this group of members.
For, members do not want the benefits of cross-subsidisation; NMC offers two hospital options, namely; Amber and Emerald, where members do not contribute towards regular day-to-day benefits and therefore each member effectively only pays for the day-to-day benefits that they incur.
5. Can NMC consider a specific package of benefits for pensioners? For example, with improved chronic benefit, Optical and Hearing aid benefits and fewer of the younger peoples benefit such as Maternity.
A specific package for pensioners will results in pensioners losing out on the benefit of cross-subsidisation. If we design a package that is specifically focussed on pensioners, then pensioners will pay significantly higher rates for the benefits that they use, like the optical and hearing aid benefits as there are no younger members within their risk pool. Pensioners might not use the maternity benefit, but this membership group uses the chronic medicine benefit much more than the younger members. The younger members contribute towards the chronic benefits, but very few of these members utilise the chronic benefits, and this makes the cost of this benefit more affordable.
6. Why did NMC not inform and provide members more information concerning the E-Med Rescue issue?
Communication was sent out to all members via e-News and NMC Scoop informing them that NMC no longer makes use of E-Meds 24-hour control room; E-Med was not removed from the provider list. Members can still make use of E-Med or any other service provider who have control rooms. E-Med made the decision to require upfront payment from members for non emergency evacuation (ie inter-hospital transfers)
7. Where can members find the Topaz & Topaz Plus service provider list? can the list extended by adding more service providers?
Members can get the updated list from the Administrator and the NMC website. The list is updated whenever a new service provider is added. Members can contact Mr Jan Husselmann from the Administrators for more information and queries on Topaz & Topaz Plus.
8. Can NMC consider communication with members in their native languages?
Yes, NMC will investigate and consider this going forward.
9. Can a member claim from both NMC and its insurer for a medical procedure?
The Medical Aid Act prevents members from belonging to two medical aid funds at the same time. And it will depend on the product if the members can also claim from the insurer.
10. Would NMC consider having a gap period for students to find employment? For instance, if a student finishes with their studies can they have three months to find employment before they’re removed from their parents’ medical aid? These three months can then be extended every three months until they find employment.
Students stay on their parents’ medical aid until February each year by when proof of study must be supplied, if not then removed from the parents’ medical aid. Parents can approach the Fund for an extension of members in unforeseen circumstances.
11. Would NMC consider a reward system for members who aren’t high claimers?
NMC is currently looking at the option to reward members who don’t use all day-to-day benefits.
12. Can NMC increase member education on the medical aid benefits and procedures?
NMC aims and focuses on educating its members on the medical aid and its procedures through member communication – via email, text messages and information sessions.
13. Would NMC exclude any illness diagnosed after becoming a member?
NMC will not exclude an illness if unaware. If it can be proved that the member was aware, NMC has the right to exclude or cancel membership.
14. Does NMC communicate with service providers to address medical aid expenses?
NAMAF engages with all service providers on an annual basis to determine reasonable increases of NAMAF tariffs, but services providers have the right to ask/set their own rates.
No questions raised.
1. What does NMC do to protect its members?
NMC provides protection to its members against on-going and unexpected medical expenses. Therefore, it provides protection to its members in the ordinary course of doing its business. NMC aims to provide this protection at the highest possible level, and at the lowest possible cost.
NMC also provides wellness programs to protect members against possible future diseases and costs. These programmes aim to prevent members from getting sick in the future. NMC also protects the data and confidentiality of members through appropriate service level agreements with service providers.
2. Why does NMC have limits per beneficiary instead of one amount for the whole family?
The limits are there to protect the Fund against very high and unnecessary claims. NMC aims to have as few members affected by the limits as possible through regular analysis of the number of members that reach the limits and by annually adjusting most limits.
The claims experience of a single member and beneficiary is obviously different. Individual members cannot have the same levels of limits as family members would have as this could open the fund up to abuse by such members due to the limits being very high relative to the expected claims.
NMC is considering amending the limits by changing the limits based on the number of members in a family to a limit which is based on the family alone. This will most likely happen in line with any changes to the contribution structures. Such changes cannot all happen at once and Trustees have been phasing-in these changes over time. This necessary level of prudence ensures that NMC can maintain its financial stability.
3. How does NMC compare with other medical aid funds re roll-over options?
NMC does not provide a roll-over benefit in the same manner as provided by other medical schemes in Namibia.Trustees have considered providing it in the past, but the conclusion was that NMC has “additional benefits” which provide better value for money and that members that select a traditional option expect full cross-subsidisation.
The roll-over benefit removes some level of the cross-subsidisation from the traditional options as healthier members are better-off compared to the sicker members. The benefits of cross-subsidisation are utilised in full only if all the members are in the same risk pool. If all the members in one option are in a single risk pool, then the average contributions are as low as possible for this group of members.
If members do not want the benefits of cross-subsidisation, then NMC offers two new generation options where members can choose their own contributions towards the day-to-day benefits and all unused funds are carried over to the new financial year.
The “additional benefit” provided by NMC is called the Benefit Booster. This is an additional layer of day-to-day benefits that each member can elect to use on any of the day-to-day disciplines. Any unused benefit does not roll over into the next year, however this ensures that the additional layer can be provided at a very low cost.
No questions raised.
1. Ms. Mercy Stephanus informed the meeting that as a younger member she only utilises her self-medication benefit, and since the benefit booster has now been removed her self-medication is depleted much earlier in the year, which forces her to see a general practitioner for a prescription when she could have made use of her self-medication benefit. The Chairperson responded that the Trustees would look into the matter to see how it can be addressed.
See answer below.
A member notified the meeting that she is on Sapphire and she does not believe that the self-medication benefit is sufficient for her and her entire family. The Actuary responded that members also have a duty to utilise the self-medication responsibly.
He further mentioned that the self-medication benefit could be increased substantially, but that this will have a substantial impact on the increase of the member contributions.
See answer below.
Another member mentioned that his colleagues are also displeased with the self-medication that has been removed from the benefit booster. He further queried whether acute medication and doctors consultations have increased following the decision to remove the self-medication from the benefit booster. The Actuary mentioned that this was one of the possible risk areas that were identified and that the situation would be monitored to see how if this is the case. He did mention however that it is very difficult to determine whether an increase in acute medication and doctors consultations would be due to the change in benefit.
It is very unfortunate that the Trustees had to make the decision to remove the self-medication benefit from the Benefit Booster. The cost of this benefit was however increasing at such a high rate that the change was unavoidable, and the Trustees had to act to maintain the financial stability of the Fund and to keep the contribution increases at acceptable levels. The Trustees anticipated that a large number of members would be impacted and therefore the decision was taken to increase the stand-alone self-medication benefit limit by 20% to soften the impact. The risk that members will now go to a doctor for a prescription is one of the risks that the Trustees identified when the change was made.
The impact of the change is being monitored by analysing the usage of the self-medication benefit, and the possible impact the change could have on the usage of general practitioners and the acute medicine benefit. If the impact of the changes is different from what the Trustees anticipated, then the Actuary will be requested to make proposals to address the member concerns regarding this benefit.
The usage of the self medication benefit is entirely left to the discretion of the member. The Trustees therefore urge members to use the benefit responsibly as this will allow the Fund to offer reasonable benefit limits without these having a material adverse impact on the contributions. Additionally, with the removal of self-medication from the Benefit Booster, the Trustees anticipate that more members will have access to the Benefit Booster benefit once their other day-to-day benefit limits are depleted.
Answer provided by the Actuary of the Fund, Mr. Nico Smit
2. Mr. Brian Hollick enquired whether the Fund is relying more on investment income and whether the Fund is getting a far smaller margin. He further enquired whether this is due to the Fund taking on high-risk members. The Actuary responded that the Fund aims at using as much of the premiums to pay benefits as possible and to get the underwriting result as close as possible to zero and to use the investment income to build reserves. The Actuary further informed the meeting that the matter of membership of a desirable age and health is under regular discussion and the Fund is putting initiatives in place to address the concern.
The long-term financial goal of the Fund is to maintain its solvency ratio at 30%. The solvency ratio is calculated as the “Total Reserves”/“Total Annual Contributions”. In order to achieve this, the Fund has to generate a surplus every year as the “Total Annual Contributions” increase every year and therefore the “Total Reserves” have to increase as well. The Fund can achieve a surplus by either generating a positive “Net Healthcare Result” or by generating healthy investment income, or both.
Due to the uncertainty attached to future claims and future investment return, it is not possible to accurately predict what these will be for the following year. The Fund does annual projections of these amounts to determine the required increase in contributions. However, the actual experience is likely to be different from the projected experience. For example, in one year the claims experience might be favourable and the investment income might be bad, or vice versa. So in any one year, the margin achieved by the Fund (also known as the “Net Healthcare Result”) might be small and then the Fund will rely more on the investment income to achieve its long-term financial goal. The next year might show the exact opposite situation.
It is therefore important to analyse the financial information over a longer period, and NMC’s financial statements over the long-term show that in some years, the fund had to rely more on investment income, and in other years the fund generated a large positive “Net Healthcare Result” which reduced its reliance on investment income.
The Trustees have put strategies in place to actively attract younger and healthier members. This, over time, should improve the risk pool, which in turn, should result in lower future contribution increases.
Answer provided by the Actuary of the Fund, Mr. Nico Smit
3. Mr. Derick Briers enquired whether an increase in membership should equal lesser administration expenses. He notified the meeting that administration expenses had grown from N$80 to N$91 million, which constitutes a 14% increase whilst membership had grown by 9%. The Actuary informed the meeting that the administration fees are calculated on a sliding scale in that the more members are administered; the less the Fund pays for administration fees per member.
The total administration cost (non-healthcare expenses) increased by 13.69%. It can be explained by an 8.80% increase in membership plus 4.89% inflation, which compare favourably with the official CPI for 2014.
For the same period the average admin cost per member only increased by 4.49% due to the increase in membership.
Answer provided by Sirk Krügel, General Manager: Finance & Premiums, Methealth Namibia Administrators
4. Ms. Monja Tjongarero informed the meeting that their employer group had recently moved from NHP to NMC and it would seem that co-payments on NMC are much higher than on NHP. She requested that the Fund investigate the correlation between the Funds in terms of co-payments.
In our findings in comparing NMC and NHP tariffs we detected that NMC members pay exactly the same tariffs, and strictly adheres to the medicine generic price rule. Meaning that it is not possible that NHP has a lesser co-payment compared to NMC’s.
Answer provided by Daniel Samaria, Manager: Marketing and Maintenance, Methealth Namibia Administrators
1. Can the fund consider implementing a roll over benefit?
The Fund will investigate and consider such a benefit for 2015.
2. NPPF Complaint/Namibia Competitions Commission Feedback?
The NPPF laid a complaint at the Namibian Competition Commission (NaCC) alleging that the Namibian Association of Medical Aid Funds (NAMAF) is acting in contradiction to the NaCC Act by setting tariffs. The industry has appointed Mr. Hartmund Ruppel to further address the matter. Mr. Ruppel is arguing that medical aid funds are not for profit entities and therefore do not qualify as undertakings under the jurisdiction of the Namibian Competitions Commission. The case is ongoing.
3. Why can a member not claim for broken spectacles?
Broken spectacles should be claimed from short term insurance as damage and not from the medical aid fund.
4. What process should be followed to nominate candidates to become Trustees?
Trustees are elected every third year and the next election will take place at the 2015 AGM. As per request from a member the nomination process will be started earlier in the year with more time for submissions. Members will receive a notice well in advance and the curricula vitae and information on nominees will be available on the Fund’s website.
1. Mrs Scott and Watermeyer submitted questions to the Fund before the Annual General Meeting. Both Mrs Scott and Mrs Watermeyer received feedback prior to the meeting. Mrs Watermeyer informed the meeting that the day to day benefits of Sapphire for GPs and Specialists has only been increased with N$500 in the last five years and that she believes this to be an insufficient increase when compared to the yearly premium adjustments in the last five years.
The Actuary explained how increases are calculated on an annual basis, and informed the meeting that they will look at the benefit increase towards the end of the year and provide Mrs. Watermeyer with feedback in this regard:
The annual benefit contribution review process is typically a very complex balancing act. On the one hand, the Trustees would like to ensure that all the benefits are increased in line with the increase in the cost of the underlying service, but on the other hand, it is also important to ensure that the contribution increases are kept to a minimum. The main driver of the annual contribution increases is the increase in the medical inflation. NMC has very little control over this increase. Additionally, NMC has to make allowance for the ever-increasing level of utilisation of healthcare services by its members. This leaves a small portion of the total increase that can be applied towards benefit enhancements.
The Trustees have to consider how to apply the “budget” for benefit increases to all the benefit disciplines. The Trustees would typically consider a number of different factors before making a decision on which benefit limits to enhance. These factors would typically include: the number of members that reach the benefit limits in the current year, any specific requests from members and service providers, the expected impact of specific targeted managed care initiatives, the need to remain competitive relative to the other medical aid funds in Namibia and the medical necessity of the specific discipline. The analysis usually indicates that there is a need to enhance the benefits provided for many of the majority of the disciplines and therefore it is unfortunately not always possible to increase all the benefit limits on an annual basis. The unfortunate reality is that some of the benefit limits remain the same for a number of years before an increase is justified.
You will however be pleased to notice that this year, the limits on Sapphire for GPs and Specialists have increased by between 6.8% and 11.1%.
As the actuaries, we can assure you that NMC values the feedback from members that it receives and it is committed to address as many concerns as possible. The statistical analysis that we do every year tells one part of the total “story”, and NMC believes that it is important to complement that rigorous statistical process with feedback from the affected parties, most important of which are the members.
Answer: Provided by Nico Smit an Actuary of True South Actuaries (Pty) Ltd