Rwanda’s pension body faces a new credibility test when it takes over the country’s community-based medical insurance scheme. The scheme covers over eight million Rwandans particularly in rural areas, as the government moves to overhaul its operations.

The government recently decided to transfer management of its medical insurance scheme Mutuelle de Sante from the Ministry of Health to the Rwanda Social Security Board (RSSB) amid increasing cases of mismanagement, corruption and falling subscriptions.

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But the pension body, which recently came under scrutiny after it emerged that it had lost at least Rwf1.6 billion ($2.3 million) of pension money through misappropriation of funds and mismanagement, now faces the daunting task of ensuring that the medical insurance scheme works. The former head of RSSB is still in court facing charges of misappropriation of funds.

The pension body has also been criticised for investment strategies that only favour rich contributors — in particular its major investments in luxury apartments and houses, despite a critical shortage of low-cost affordable housing. But the fund denies any wrongdoing.

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Analysts said the fund’s immediate challenge will be to ensure that the health scheme is self-sustaining — which will require it to either increase premiums or be forced to seek subsides to make it financially sustainable.

In addition, they say making the scheme financially sustainable will require the wealthier members of society to start making mandatory contributions to the scheme since increasing premiums may not be viable for the vulnerable members of society.

Currently, premiums are paid based on a stratification, with the government paying Rwf2,000 ($2.9) annually for those considered to be extremely poor while other members contribute between Rwf3,000 ($4) and Rwf7,000 ($10) annually.

It is also partly financed by external aid, from partners such as the Global Fund to Fight Aids, Tuberculosis and Malaria, which covers insurance premiums for about 1.5 million vulnerable Rwandans.

But despite being heavily subsidised by the government, the price for some members of the population remains prohibitively high. In addition, medical insurance companies also contribute a portion of their premiums to the scheme.

“The contributions are very small and the majority of members are low-income earners, some of whom are not in gainful employment; but this is the category of people who usually need medical services. But if you consider the contributions and the costs related to their medical services — they are not tangible,” said an investment analyst.

Though RSSB’s management has said premiums will not be increased immediately, analysts say premiums will have to be increased if the fund wants to improve service delivery.

However, stakeholders are optimistic that RSSB’s current management will manage the medical scheme well given its good record on managing the Rwanda Medical Insurance (RAMA) — a compulsory medical cover for civil servants.

RAMA currently has more than 200,000 members and more than 500,000 beneficiaries as it covers civil servants and their families.

“Moving Mutuelle de Sante to RSSB will be beneficial both for management and quality of care provision because the pension body has a clearer management style and is well versed in managing and delivering health insurance for public servants,” said Christian Rusangwa, the district clinical director of Partners In Health in Rwanda, an NGO based in Burera district in Northern Province.

“Civil servants have been enjoying good coverage and a wide range of products and services at all health facilities all over Rwanda,” he added.

The reform process is expected to be effective by the end of February when the law, currently before parliament, is promulgated to facilitate the transfer and new structure of RSSB. An actuarial evaluation of the scheme’s worth is also ongoing to facilitate the transfer.

But the health scheme has in recent years been hit by decreasing subscriptions and accumulation of debts, threatening its very existence. In addition, failure to provide timely payments to service providers, in particular public hospitals and pharmacies, has also compromised the quality of healthcare in the country.

“The main problem with Mutuelle de Sante involved financial management — the contributions were being collected from individuals by local government authorities, but some of that money never reached the coffers of Mutuelle de Sante,” said Daniel Ufitikirezi, director-general of RSSB. The pension body plans to use an electronic database to collect and monitor contributions.

The financial management of the scheme will now be centralised as opposed to the existing structure that was managed differently in the 30 districts across the country, which made co-ordination at the national level challenging.

Statistics show subscriptions have been falling gradually — with an estimated 73 per cent of Rwandans subscribed to the scheme in the past fiscal year 2013/14, down from 80.7 per cent and 90.7 per cent in the financial years 2012/13 and 2011/12, respectively.

Launched in 2004, Mutuelle de Sante was rolled out to ensure that all Rwandans have access to healthcare.