News Column

NACC Probing Medical Aid Funds Monopoly

June 12, 2014

Chamwe Kaira



THE Namibian Competition Commission (NaCC) has started investigating members of the Namibian Association of Medical Aid Funds (Namaf) to determine whether the funds have been violating provisions of the Competition Act.

This follows a complaint lodged with the commission by the Namibia Private Practitioners Forum (NPPF) three years ago.

NPPF contends that Namaf lacks the statutory power to set the Namaf benchmark tariffs and that such practice is in any event prohibited by the laws governing competition. The NPPF also raised concerns over the laws that create the management structure of Namaf. Namaf management consists of representatives from medical aid funds while Namaf also controls medical aid funds.

NPPF hired ISG Risk Services, a private firm, to institute an inquiry into the medical aid fund industry and assess the levels of transparency and appropriateness of governance structures employed.

The inquiry found that there is severe lack of transparency with all open funds, and even their regulator, Namfisa, refuses to provide public documents such as annual financial statements. It was argued by the funds and Namfisa that these statements are no longer public in the public domain.

The inquiry by ISG also found numerous instances of conflict of interest on the part of persons managing the funds, the administrators, as well as Namaf.

It became clear that neither Namaf nor the medical aid funds it controls had any intention of doing away with the setting and applying of the Namaf benchmark of tariffs.

During 2011, the NPPF requested the Namibian Competition Commission to investigate a practice or agreement which the NPPF regards as a prohibited practice or agreement aimed at the lessening of competition in the industry. The complaint was only against Namaf, but the commission expanded the investigation to include the funds as well.

The management of Namaf and the funds denied this allegation.

The notice by the NaCC to the medical aid fund association allows each party 30 days to provide the commission with further submissions.

The notice reads that the commission proposes to make a decision that has been infringed and it considers to seek relief from the High Court to declare that Namaf and its members contravened a section of the Act and order that they cease the conduct in question.

Based on 10% of the 2012 contributions to the nine medical aid funds alone, the possible penalty can exceed an accumulative N$192 million.


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Source: AllAfrica


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