By Michael Gwarisa
The Association of Healthcare Funders of Zimbabwe (AHFoZ) has raised alarm over the proposed Insurance and Pensions Commission (IPEC) Amendment Bill of 2024, warning that the new regulations could destabilize the country’s medical aid system and lead to its eventual collapse.
The Bill, which seeks to classify Medical Aid Societies under financial services for regulation by IPEC, has sparked widespread concern among healthcare stakeholders who argue that the move could have far-reaching consequences for both the medical aid sector and the broader healthcare ecosystem.
The proposed legislation, set to undergo countrywide public hearings from March 24 to 28, 2025, aims to bring Medical Aid Societies under the same regulatory framework as insurance companies.
However, AHFoZ argues that this approach fails to recognize the unique nature of medical aid societies, which operate on a non-profit basis and are fundamentally different from profit-driven insurance entities.
In a press statement released on March 20, 2025, AHFoZ Chief Executive Ms. Shylet Sanyanga emphasized that medical aid societies are not insurance companies.
“Medical Aid Societies are in the business of health, focusing on a holistic approach to people’s wellbeing by prioritizing prevention, wellness, treatment, and rehabilitation,” she said.
They are run by their members, rely on member contributions, and are predominantly non-profit entities.
Their primary purpose is to facilitate the funding of private healthcare services for their members through pooled funds, not to generate profit.”
Sanyanga warned that over-regulation under the IPEC Bill could threaten the voluntary nature of medical aid societies, potentially leading to members opting out and the eventual collapse of the sector.
“The essence of these societies lies in their voluntary nature.
Over-regulation by classifying them as financial entities threatens their continuity, as restrictive regulations may lead members to opt out and the collapse of the sector,” she added.
One of the key concerns raised by AHFoZ is the potential mismatch in regulatory frameworks.
While the Bill proposes to regulate Medical Aid Societies under IPEC, healthcare service providers remain under the jurisdiction of the Ministry of Health.
This disjointed approach, AHFoZ argues, could create discord and compromise health outcomes.
The association is calling for a unified regulatory authority for the healthcare sector to ensure effective dispute resolution and prioritize the interests of health citizens.
“Subjecting these societies to the same regulatory framework as insurance entities while healthcare service providers are under the Ministry of Health could create a mismatch and discord which could compromise health outcomes,” she added.
“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 prioritized.”
The IPEC Bill also introduces several administrative requirements that AHFoZ believes will place an unnecessary burden on Medical Aid Societies. Among these is the mandate for societies to maintain an asset register and notify IPEC prior to selling any assets.
Additionally, the Bill imposes punitive fines for non-compliance, which could equate to the value of the asset in question.
AHFoZ argues that these fines are excessively high and could stifle the operational efficiency of medical aid societies, ultimately increasing the cost of medical aid for members.
“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,” the statement warned.
The Unique Nature of Medical Aid, AHFoZ also highlighted the unique nature of medical aid compared to other forms of insurance.
Unlike funeral cover or motor vehicle insurance, which are triggered by rare events, medical aid is used frequently as people fall ill multiple times throughout their lives.
In some cases, medical treatment requires extensive investigations, surgery, rehabilitation, and follow-ups, often necessitating care both locally and abroad.
“With medical aid, there are numerous incidents as people fall sick numerous times.
Treatment might require extensive investigations, surgery, rehabilitation, and follow-ups, among other things.
This makes medical aid fundamentally different from other forms of insurance,” the statement explained.
Medical Aid Societies play a critical role in Zimbabwe’s healthcare system, contributing approximately 80% of healthcare service providers’ income.
Over the years, these societies have complemented the government’s efforts in facilitating access to healthcare services.
AHFoZ warns that the collapse of the medical aid sector would have a devastating impact on the entire healthcare system, leaving millions of Zimbabweans without access to essential healthcare services.
“The collapse of this sector would impact the entire healthcare sector.
Medical Aid Societies have been instrumental in ensuring that Zimbabweans have access to quality healthcare, and any disruption to their operations could have dire consequences,” the statement read.
Despite the potential implications of the IPEC Bill, AHFoZ has not yet been consulted on the proposed legislation.
The association is calling for meaningful engagement with policymakers to ensure that the unique nature of medical aid societies is taken into account before the Bill is enacted.
“AHFoZ has not yet been consulted and looks forward to the opportunity to give its views during a consultation, since it is the industry to be regulated,” the statement concluded.
