MBABANE – Rising healthcare costs that continue to increase faster than inflation remain a major concern for the Eswatini Medical Aid Fund.
This is despite the medical scheme recording a significant financial recovery during the 2024 financial year.
According to the Fund’s Directors’ Report for the year ended December 31, 2024 which was handed to members early this month at Hilton Garden Inn during an AGM, healthcare inflation continues to exceed the Consumer Price Index (CPI), placing pressure on the sustainability of medical schemes and the affordability of healthcare cover for members.
The report states that higher utilisation of healthcare services remains the biggest driver of healthcare inflation, with demand for medical services outweighing available supply. It noted that an ageing population and an increase in members suffering from chronic and non-communicable diseases were contributing to rising healthcare expenditure.
“Healthcare costs continue to rise faster than inflation, driven by higher utilisation of healthcare benefits due to factors such as an ageing population,” the report states.
The Fund further warned that high-cost cases linked to non-communicable diseases would continue to pose a challenge for the Scheme and the wider medical aid industry in the coming years.
Despite these concerns, the Scheme posted a strong financial turnaround during the year under review. The Fund recorded a surplus of E42.6 million for 2024, compared to a deficit of E14.1 million in 2023.
The report attributed the improved performance partly to a reduction in risk claims incurred following the stabilisation of economic activity after the COVID-19 pandemic. Net claims incurred declined by six percent to E454.1 million from E483.3 million recorded in the previous financial year.
According to the Directors, the decline in claims was largely driven by fraud prevention measures introduced by the Fund to curb abuse, waste, and fraudulent claims by members. The controls targeted areas such as pathology expenses and spectacle frame claims.
“The decrease can also be attributable to the decrease in the admission and re-admission rates,” the report noted.
The Fund’s gross contribution income also increased during the reporting period. Contributions rose by seven percent to E627.9 million from E586.3 million in 2023. This followed an approved contribution increase of five percent during the year.
The Scheme said contribution growth exceeded expectations due to a rise in membership numbers. Membership increased from 17,135 in 2023 to 17,241 in 2024, representing a net gain of 106 members.
The Directors stated that despite membership terminations resulting from non-payment of contributions, the Fund remained one of the preferred medical aid providers for major employers and individual members in Eswatini.
However, the Scheme cautioned that economic challenges locally and globally would continue to affect membership growth in future. It said affordability pressures were forcing some members to downgrade to lower-priced benefit options, while retrenchments by employers were also expected to negatively impact growth.
“The Scheme will continue to experience an adverse direct impact on membership growth rates due to changes in economic and market conditions both locally and globally,” the report stated.
The Directors said the Fund would continue monitoring these economic pressures closely to ensure long-term sustainability.
The report also highlighted broader structural challenges facing the healthcare sector, noting that growth in medical services required increased investment in healthcare infrastructure, including hospitals and technological developments.
Demand for healthcare services, according to the report, continues to rise because of deteriorating beneficiary demographics, where older and sicker members require more expensive and extensive healthcare treatment compared to younger members.
While the Fund has returned to profitability, the Directors warned that containing healthcare inflation and balancing affordability for members would remain critical in safeguarding the future sustainability of the Scheme.
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