Funds could free up billions

2012-08-01 00:00

MEDICAL aid schemes are sitting on billions of rands in “dead” investments because they are legally required to keep 25% of members’ contributions in reserve funds in the event of a catastrophe.

Many schemes would be considerably better off financially if they could use the money more productively than just keeping it in safe investments.

The Health Monitor Company CEO Christoff Raath said this yesterday at the annual conference of the Board of Healthcare Funders (BHF) being held at the Champagne Sports Resort in the Drakens­berg. Raath said large schemes like Discovery Health had to keep about R11 billion in reserve in order to maintain the required 25% solvency level.

“Just think what one could achieve by utilising R5 billion appropriately to the advantage of members,” Raath said.

He said the Council for Medical Schemes was aware of the issue and suggested solvency levels of 13% to 15% should afford enough protection.

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