HomeLocal NewsMedical aid firms and life assurers hike fees

Medical aid firms and life assurers hike fees

KUDZAI KUWAZA

ZIMBABWE’s medical aid and funeral assurance firms have hiked fees by huge margins, throwing hard pressed consumers into dire straits.

The steep upward reviews followed a few weeks after national power company Zesa Holdings doubled electricity tariffs, raising the spectre of price hikes across sectors.

The Zimbabwe Congress of Trade Unions (ZCTU) said this week that it was worried by the sudden hikes, which came as government claimed prices had begun to stabilise in response to improved access to foreign currency through its forex auction system.

A survey by businessdigest showed that some firms had been forced to increase their contributions to workers’ medical aid packages to cushion their staff.

First Mutual Health has nearly doubled the cost for its packages, our survey showed, with adult corporate packages like Ruby shooting to ZW$3 038 per person on October 1, from ZW$1 519 in June this year.

Other health packages under the First Mutual Health brand like Sapphire Plus have been hiked to ZW$7 730 effective October 1, from ZW$3 865 in June.

Life assurance giant, Nyaradzo said the upward reviews had been necessitated by the deteriorating economic climate.

“The current difficult hyperinflationary environment which has been exacerbated by the impact of the Covid-19 pandemic has continued to negatively affect the preservation of funeral policy benefits,” Nyaradzo wrote in a circular to policyholders.

“In the past twelve months, the cost of providing funeral services, especially the non-monetary benefits, has risen astronomically in line with the depreciating local currency. The resultant unsustainable mismatch between premiums and cost of assured benefits is threatening the continued provision of funeral services to policyholders,” it said.

Nyaradzo will be reviewing its fees at the end of October. But tempers have been rising in Zimbabwe as the cost of living escalates.

A Bindura lecturer recently approached the courts demanding US$10 000 in damages from his employer after his August salary was wiped by medical aid deductions.

He is also suing Premier Medical Aid Society, one of Zimbabwe’s biggest players. Zimbabwe’s consumers are battling to survive under extremely difficult circumstances.

A charging inflation currently estimated at more than 700% and a deepening currency crisis has made life difficult during a time when many have lost their sources of income to lockdowns rolled out to contain the spread of the Covid-19 scourge.

The Employers’ Confederation of Zimbabwe estimates that 20 to 30% of formal jobs have been lost this year.

ZCTU secretary-general Japhet Moyo said sharp hikes in medical aid and funeral fees will worsen an already difficult situation.

“We are aware that funeral cover and other insurance cover like medical aid premiums have gone up with the net effect of wiping salaries of most workers. Even some service providers increased their data tariffs silently,” Moyo said. “The government has upped its propaganda fully aware that prices of goods and services are beyond the reach of many.”

Business consultant Simon Kayereka said there was need for government to be honest about the reality on the ground.

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