Wednesday marked the announcement of a potential amalgamation between two of the country’s biggest medical aids, Bonitas medical aid fund (Bonitas) and Liberty Life schemes (LMS). Discussions between the two powerhouses are underway as they ultimately aim to provide “an even stronger and more sustainable medical scheme that will provide enhanced cover and benefits to their respective members. If successful, the amalgamation will further entrench Bonitas’ role as a leader in the healthcare market,” stated both Bonitas and LMS.
The amalgamated scheme will be designed with both the consumers’ health market and financial needs in mind. This will be done so as to offer more cost-effective options to their members without skimping on benefits and ultimately member well-being.
“While negotiations are at an advanced stage, member consultation is imperative and various regulatory processes still need to be satisfied for the transaction to be concluded,” stated Andrew Edwards, executive principal officer for LMS.
While Dr Bobby Ramasia, principal executive officer for Bonitas, approved he added that talks with the Council of Medical Schemes (CMS), were in session to ensure all the correct processes are followed and approved.
“The LMS and Bonitas Boards of Trustees commissioned preliminary investigations into a possible amalgamation between the two schemes. The positive outcomes of the initial feasibility studies provided sufficient motivation for both Boards to explore an amalgamation process,” explained Bonitas and LMS.
The benefits
The benefits of such a move are numerous, agreed both medical aid providers. Bonitas, the larger of the two, is currently under the administration of Medscheme, and is the second largest open medical aid nationally. This has seen the scheme’s financial indicators weighing at above legislated and industry average requirements.
“Bonitas has one of the highest credit ratings in the industry, which is synonymous with a high claims-paying ability, in turn ensuring members access to quality healthcare,” noted Bonitas.
“We are delighted with the opportunity and wealth of benefits it opens up to our members and financial advisers,” added Edwards.
According to Bonitas and LMS, the new scheme would also boast a broader national footprint, ‘better economies of scale to negotiate better rates and improve provider networks.’
“Consolidation among medical schemes is an increasing trend which is indicative of the current healthcare industry. Bonitas is committed to acting in the best interests of our members at all times. This amalgamation will reinforce our size and enhance our ability to negotiate improved benefits and services with healthcare providers to ensure our members have access to affordable, quality healthcare,” reassured Ramasia.
Head of insurance at Insurance Busters, Will Keevy agreed: “We have been seeing consolidations in recent years and I believe the nature of the economy and the medical aid industry lends itself to these mergers since it gives the schemes more bargaining power.”
Keevy further stated that in the case of this merger, ‘it was partly due to Liberty Life deciding to focus on its core business which is the Life business and moving away from non-core businesses like medical aid and rewards programmes.’
How will it affect members?
Both medical aid offerings will remain unaffected for the remainder of the year, until the legal requirements are all met.
“Members of both schemes will be approached for consent on the amalgamation, and if member approval is obtained, then both schemes will begin the formal regulatory processes to obtain the necessary regulatory approvals. The respective, Boards of Trustees will keep stakeholders updated as and when new developments unfold,” explained Bonitas and LMS.
With 50 years combined knowledge and experience, “the Boards of LMS and Bonitas entered into these amalgamation negotiations with the best interests of our members at heart. We believe this venture will be to their advantage and benefit,” concluded Ramasia.