MEDICAL AID FUNDS

NAMFISA (“the Authority”) has been to ensure that these changes are fair to mem –
tasked, amongst others, to regulate and se – bers, but that they are compliant with all the
cure appropriate levels of protection for ben – provisions of the Act.
eficiaries of medical aid funds. This includes
conducting an assessment of the proposed In assessing contribution changes, the Au –
annual alterations in benefits and the cor – thority considers a fund’s solvency level,
responding changes in the contributions to which is a proportion of the fund’s total re –
fund these benefit changes. The contribution serve over its total annual contributions. The
rates are specified in the Rules of the medi – solvency level must be at least 25%. Addi –
cal aid fund. tional variables that are taken into account
in the assessment are pensioner ratio, depen –
The Medical Aid Funds Act 23 of 1995 (“the dent ratio and claims ratio. The performance
Act”) stipulates that a registered fund may, of the fund in terms of operations, the demo –
in the manner directed by its rules, amend or graphic data and expenses (managed health –
repeal any such rules or make any additional care, non-health expenditures and adminis –
rules but, notwithstanding the provisions of tration costs) are also considered. Moreover,
any other law, no such alteration, rescission the prevailing inflation or consumer price
or addition shall be valid unless it has been index (CPI) is considered to ensure that any
approved by the Registrar of Medical Aid changes in contributions are reasonable.
Funds. Therefore, since contribution rates Funds must also submit actuarial reports to
“I realised that financial
are specified in the rules of the funds, any the Authority to justify the proposed contri –
education is something
rule amendments need to be approved before bution increases.
implementation. I needed to acquire.
And soon.” The average contribution increase for the
Before any amendment to the rules as a re – 2013 financial year was 9.3% for open funds
sult of benefit changes can be made, a thor – and 9.9% for closed funds. The main driv –
ough evaluation of benefit changes vis-à-vis er of the increase is medical inflation or the
contribution changes has to be conducted. NAMAF Benchmark Tariff Increases, which
The rationale of this evaluation is not only was estimated to be an average of 7.85%.

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