Medical aid shortfalls explained Ms Shylet Sanyanga

There have been numerous views across the nation, on issues of shortfalls and co-payments incurred by medical aid members at the point of care. Ms Shylet Sanyanga, the chief executive officer of Association of Healthcare Funders of Zimbabwe(AHFoZ), clarifies shortfalls and co-payments below:

Question: What is a shortfall

Answer: A shortfall is the difference between what a healthcare service provider charges and what the   medical aid scheme pays out.  There are different reasons for shortfalls some of which are as follows:

  If the service provider’s cost is greater than the set tariff fee, the excess becomes a shortfall, which the service provider may collect from the patient or may choose to waiver.

 When a member uses benefits not covered under their package, for example, a basic scheme member accesses a private hospital. The claim will be paid at the level of the basic scheme award and the difference becomes a shortfall.

  Benefits exhausted, for example, when a member has used up their allowance for spectacles, they may not claim again before the permissible period has lapsed, for spectacles its usually 2-3 years. If they claim before the stipulated period, that becomes a shortfall.

Annual global limit exhausted, if a member has exhausted their actuarially determined annual limit for specific categories such as medicines or some Dental treatment, before end of the year, further  purchases or treatment will be a  shortfall.

After joining a medical aid, waiting periods differ from society to society depending on the nature of treatment required. If a patient is treated during the waiting period, the costs will be a shortfall.

Sub- economic contributions by organisations lead to insufficient allocations for annual limits and poor packages with shortfalls.

Late payments of contributions by employers or members negatively impact on the liquidity positions of medical aid societies and impacts on the turnaround times for payment of service provider claims. This results in some providers rejecting some cards and demanding for cash up front.

 All medical aid packages have exclusions, for example, cosmetic plastic surgery or any intervention deemed to be non-medically essential. Such costs will be charged for at the service provider

World over, health insurance has   an “excess” component, and does not always pay for everything in full.


A co-payment is also an amount that a member would be required to  pay at the point of care,  for certain treatments or procedures. This occurs when medical aid societies and healthcare service providers agree to the appropriateness of a certain fee or fees  in principle,  then  following  pleas of affordability constraints by medical aid societies,  both parties mutually  agree  to a compromise fee and agree that service providers may charge those fees in full  while medical aid societies will pay the agreed to/ compromise fees. The difference becomes the co-payment which will be collected by the service provider at the point of care. A co-payment is therefore a figure known and agreed to by both medical aid societies and service providers. It is transparent and predictable, especially in an environment where a stable currency is being used.

In Zimbabwe, because of the changes in the exchange rate, shortfalls in local currency-denominated products are common and vary in severity. This is because some service providers tend to chase the parallel rate. However, medical aid societies cannot chase the rate as contributions cannot be changed frequently in line with the exchange rate. This is because contributions come from salaries and salaries are also not reviewed that frequently, to chase parallel rate. Due to this mismatch, a gap is created between what the providers charge and what can be absorbed within the inelastic contributions and salaries.  This results in shortfalls, which in some extreme cases can exceed half of the total bill charged at the point of care. This usually depends on the service provider.

Question: Why shortfalls and co-payments when one would have contributed for years without even utilising a penny? And what are the common reasons for shortfalls?


  The medical aid concept is based on the principle of pooling resources and risk sharing, therefore, individuals do not accumulate personal balances. The funds contributed belong to the pool and are for use by anyone also contributing to the pool, if they need healthcare services for themselves or for their dependants.

Question: Why are AHFoZ tariffs different from service providers’ tariffs?

Answer: This is attributed to a number of variables, which include the following:

Providers are professionals who believe they can charge what  they believe their service is worth,  in their opinion, whilst the AHFoZ tariff is scientifically derived.

  Medical aid contributions are mainly in local currency as salaries are predominantly in local currency, while service providers’ tariffs are mainly in USD.

  Differences in the applicable exchange rates with one party using the official exchange rate while the other party uses the parallel market rate.

Question: Do all medical aid societies pay according to  the AHFoZ tariffs or are they bound to reimburse according to AHFoZ tariffs?

Answer: The AHFoZ tariff is a scientifically derived guideline for AHFoZ members. Some opt to negotiate for lower rates with service providers, in exchange for whatever they would have agreed to with the service providers. The majority of the AHFoZ members adhere to the AHFoZ tariffs.

AHFoZ is a representative body for medical aid societies in Zimbabwe.

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