The Namibia Financial Institutions Supervisory Authority (NAMFISA) says Namibians spent over N$1.2 billion on healthcare in the fourth quarter of 2024.
According to the authority, although this marked a 14.3% decline from the previous quarter, the figure reflected a year-on-year increase of 1.2%.
“The observed decline in claims during the fourth quarter is largely attributed to the cyclical nature of healthcare utilisation, as members typically exhaust their annual benefits by this time of the year. Moreover, the holiday season tends to record fewer medical consultations due to a drop in reported illnesses,” NAMFISA stated in its Quarterly Statistical Report for Q4 2024.
Healthcare claims, which follow a seasonal pattern, generally peak in the second and third quarters before declining toward year-end.
“Claims typically peak during mid-year when illnesses and health interventions are more frequent, but we tend to see a slowdown in activity during the last quarter as members reach benefit thresholds or defer non-urgent treatments,” the report explained.
Hospital admissions, pharmacist-dispensed medicine, and consultations with general practitioners and specialists accounted for 69.9% of total healthcare expenditure in the fourth quarter.
The report noted that this is down from 73.4% in the third quarter and 71.5% in the same period the previous year.
In addition to healthcare costs, medical aid funds incurred N$149 million in non-healthcare expenditure, comprising administration, operational, managed care, and net-reinsurance costs.
Furthermore, this marks a 0.9% increase from the previous quarter and a 2.9% increase from the same period in 2023.
“Non-healthcare expenses, especially administration costs, continue to place pressure on medical aid funds. While these costs are necessary for the effective management of funds, there is a continuous need to evaluate operational efficiencies to ensure affordability for members,” the regulator noted.
Total contributions to medical aid funds decreased by 0.3% to N$1.5 billion in the fourth quarter, although they were 11.4% higher compared to the previous year.
NAMFISA attributed the quarterly drop to the influx of younger members, who contribute at lower rates, and the downgrading of benefit options.
The average contribution income per beneficiary was N$6,913, showing a marginal 0.1% drop from the previous quarter but a 9.4% increase year-on-year.
Meanwhile, average claims per beneficiary declined to N$5,272, reflecting a 14.7% quarterly drop and a 0.7% decrease year-on-year.
“This trend reflects a moderation in per capita healthcare consumption, which may be a result of both benefit exhaustion and changing patterns in how members access medical services, especially in the last months of the year,” NAMFISA explained.
The medical aid industry recorded a net surplus during the quarter under review, with total assets exceeding liabilities. The industry also met the prudential reserves benchmark of 25%, signalling a stable financial position.
Industry assets reached N$2.8 billion by the end of December 2024, an increase of 17.6% from the previous quarter and 31.8% year-on-year.
This growth was driven by new investments using surplus cash and gains in existing investment portfolios.
“Strategic investment of excess funds and favourable market performance contributed to the significant growth in assets, positioning the industry for continued sustainability and better returns,” according to NAMFISA.
Liabilities rose to N$729.6 million, up 18.1% from the previous quarter and 15.6% year-on-year, mainly due to higher provisions for claims incurred but not reported (IBNR), rollover benefits, and accounts payable.
“Despite the increase in short-term liabilities, the industry’s robust investment portfolio, valued at N$2.3 billion, is more than adequate to meet current and anticipated obligations,” the regulator confirmed.
Membership grew modestly to 219,790 beneficiaries, a 0.5% quarterly and 1.9% annual increase. Notably, pensioner members rose by 0.8% quarter-on-quarter and 6.1% year-on-year.
