S. African Insurers May Fund Vaccines for Broader Population
South African Insurers May Fund Vaccines for Broader Population
(Bloomberg) -- South African medical-insurance companies, business organizations and the government are developing a program in which the private sector will help fund Covid-19 vaccines for people not covered by insurance.
Legislation has been amended to allow the companies to fund shots for people who don’t have medical insurance and talks are now focused on the number of those who may benefit, said Stavros Nicolaou, head of the Health Workgroup for Business for South Africa, a grouping of South Africa’s biggest business organizations. In addition to medical insurers, companies such as miners may contribute funds so their workers can be covered, he said.
“We are looking at a model of some cover for uncovered patients,” he said in an interview on Monday. “For every funded person, there will be a contribution to the unfunded.”
The talks come as South Africa’s government faces increasing criticism by labor unions, health officials and opposition parties for its failure to procure vaccines even as at least 33 nations begin inoculating their populations. The country has yet to conclude any direct supply agreements with pharmaceutical companies. It expects to begin receiving shots in the second quarter to cover a 10th of its about 60 million people through the Covax initiative, which is trying to ensure equitable access to vaccines.
As of 2019, 17% of South Africa’s population was covered by medical insurance, according to the national statistics agency.
South Africa, with 1.11 million confirmed infections and more than 30,000 deaths, is the nation in Africa worst affected by Covid-19.
Allowing medical insurers or companies to import vaccines solely for their own members or employees could spark tension in South Africa, which is one of the world’s most unequal societies. The government is already struggling to meet a host of economic challenges, with many state companies dependent on bailouts from the budget.
Discovery Ltd. Chief Executive Officer Adrian Gore is heading a panel that’s discussing how the program will work. The company is South Africa’s biggest medical-insurance company.
30% Funding
The collaboration between the government and medical insurers could help fund vaccines for about 30% of the population, in addition to supplies expected from the Covax initiative, said Discovery Health Ltd. CEO Ryan Noach. That means funding still needs to be sought for about 27% of the population to reach Health Minister Zweli Mkhize’s vaccination target of about two-thirds of residents to achieve herd immunity.
“That fundraising effort is still under way,” Noach said in an interview with Radio 702. “I think corporate South Africa is certainly going to come to the party.”
Momentum Health Solutions Ltd., one of the nations biggest medical insurers, is working with the authorities to ensure vaccines are made available to the most at-risk members of the population, marketing head Damian McHugh said Tuesday. FedHealth, another large insurance provider, said it aims to have all its members vaccinated by the end of 2021.
FedHealth is “comfortable that it will be able to cover the cost of the Covid-19 vaccine in 2021 from risk for all its members without impacting its 2021 financial budget,” the company said in an emailed response to questions.
Estimates show the cost of vaccinating medical-insurance company members in South Africa could total about 7 billion rand ($470 million), or just under 2% of gross contributions received, Noach said. The estimate includes logistics costs and will be influenced by final pricing, the vaccine mix and prevailing exchange rates, he said.
Discovery Health Medical Schemes has already set aside money to aid its members with vaccines.
Business is also trying to accelerate the arrival of vaccines in the country, Nicolaou said.
“We need to change the public narrative,” he said. “How do you, if at all, accelerate the timing?”
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