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Insuring hope: insurance for individuals with AIDS in Africa is hard to come by, but carriers are making changes to help the millions infected with the disease.

Millions of African citizens live under a dark cloud. The threat of HIV/AIDS looms over the continent, and those affected by the disease are in dire need of medical attention, financial protection for dependents and coverage to pay for funerals. With nearly 2.3 million AIDS-related deaths across the continent last year, some researchers say the disease is entering the "death" phase as AIDS-related mortality is beginning to surpass the number of new HIV infections. And while medical attention is something few Africans can afford. insurance for many of those with HIV/AIDS has been difficult to find.

Insurance in general is scarce for many individuals in Africa. FinMark Trust, an African-based independent trust, estimates that only one in five Africans has a life insurance policy and only one in six has medical coverage.

Several insurers are now taking a hard look at the AIDS pandemic and trying to reach out to those infected with the disease and their families. Many insurers also are eliminating discriminatory exclusions against those with the disease.

A Country Hard Hit

AIDS began in Africa more than 80 years ago and today has become the leading cause of death across the continent. Since the disease reached pandemic proportions in the late 1970s, nearly 19 million Africans have died from AIDS-related illness. About 1,800 people are newly infected with HIV each day in South Africa.

No one is immune to the AIDS threat; the disease is impacting every economic sector across Africa. Occupations hard hit by the disease include miners, farmers, health-care workers, teachers and security workers.

HIV and AIDS also are taking a major economic toll on the continent. About $4 billion is needed annually to contain the pandemic, according to the United Nations.

A part of that toll is that HIV and AIDS are driving higher insurance premiums.

In the group life insurance market, premiums have risen over the past five to 10 years, with increases of 10% to 15% from year to year not uncommon. Most of the rise is linked to the growing number of HIV and AIDS cases. In fact, the cost of group cover has more than doubled from 10 years ago in many blue-collar industries, said Francois Marais, product actuary for Sanlam Life Insurance Ltd., which has about 20% of the overall South African insurance market share. On the other hand, he said, premiums on individual policies have been steadily declining over the years, particularly in the high-income rate groups.

Many insurers rely on the Actuarial Society of South Africa's ASSA2000 AIDS and demographic model, which projects the impact of HIV/AIDS on mortality, disability and health risk R)r group and individual insurance products, to price life products. The projections also are used to determine reserves required by life writers.

Millions of Africans with HIV and AIDS are leaving their disease untreated because they lack life and/or medical insurance. Only about 15% of the African adult population has life assurance policies, while only 10% have medical coverage and 15% have a funeral policy. And those with life and health policies are usually wealthy and white--those least likely to be infected with HIV High levels of unemployment in Africa exacerbate the problem of accessibility.

Wider access is provided through compulsory group-insurance arrangements for the employees of a specific employer or the members of organized labor, said Connie Motshumi, general manager, stakeholders relations, of the Life Offices' Association of South Africa, an association of registered long-term insurers conducting business in the country. "These range from basic funeral cover of a few thousands units of currency, to group life multiples of annual earnings, as well as disability benefits. Life coverage, whether individual or group, is subject to some form of underwriting depending on the amount of life cover to be provided," Motshumi said.

AIDS Coverage

Some South African insurers are developing insurance products for HIV-positive clients. While some of these products have existed in the marketplace for some time, they previously had restricted terms and were expensive because they were priced on a basis that ignored the effects of antiretroviral therapy, said Dominic Liber, director, Quindiem Consulting, which is an organization of actuaries and analysts. As insurers begin to price products to allow for the drugs used to treat HIV and AIDS, prices will drop significantly, he said.

Most individual life policies and many group life assurance arrangements offer what is known in South Africa as "dread disease benefits," which act as an accelerated death benefit whereby all or part of the benefit is paid out when the insured contracts one of a number of illnesses. When the insured eventually dies, the death benefit is normally reduced by the dread disease benefit paid out. AIDS is listed most uniformly as a dread disease fi)r the purposes of the benefit, said Life Offices' Association's Motshumi. The insured can then use the proceeds to purchase treatment.

Since paying out its first AIDS-related death claim in 1988, Sanlam Life continues to assist those with the disease. The company developed an AIDS policy that provides guidelines for managing HIV and AIDS in the workplace. The program includes education and personal support by nurse coordinators, regular consultations and tests to monitor insureds' health, and an additional 1,200 rand, or about $172, per beneficiary per month to be used for medicines--including antiretroviral therapy, vaccinations and vitamins--related to the treatment of HIV or AIDS.

A New Approach

Obtaining coverage for HIV/AIDS, however, remains challenging for some living with the disease. Many major life insurers issue a standard policy only to HIV-negative people, while some offer costly and highly restrictive individual plans for HIV-positive insureds. Also, some small carriers still add AIDS exclusion clauses to policies or put caps on AIDS-related care.

Advocates are taking an active stance to end discrimination against those with HIV and AIDS.

The AIDS advocacy group National Association of People Living with HIV/AIDS, also known as NAPWA, has been running a campaign for the past few years against insurers and banks to end alleged discriminatory policies. Discriminating practices by insurers include not providing pretest and post-testing counseling and a lack of confidentiality. NAPWA also is calling on insurers to stop categorizing HIV-positive people as uninsurable and to stop rejecting life cover for them.

"In the early '80s, most insurers thought exclusion clauses were the solution to the HIV problem--for example, to exclude AIDS as a cause for death or disability. Exclusion clauses, however, don't work well if the cause of death is not accurately reported, and it's not politically acceptable to have AIDS exclusion clauses anymore," said Marais of Sanlam Life.

About 10 years ago, some insurers moved to multitest policies which required policyholders to prove their HIV-negative status by a retest every five years to maintain their policy. If someone became HIV-positive, the death and disability cover lapsed and the policy was converted to a pure savings policy, due to practical difficulties with regular retesting. That practice has largely ceased, Marais said. "Today, we test practically all applicants, but only at inception. If they're negative, they get a policy that provides hall coverage regardless of what happens to them. If they are HIV-positive, they are basically uninsurable in the same way as they would be if they had any other life-threatening disease," he said.

Sanlam Life does provide a special risk policy with limited cover for people with any type of incurable illness, including HIV/AIDS, but premiums are high. For example, a 10-year policy with life cover of 50,000 rand, with about 35,000 rand in maturity value if the policyholder survives more than 10 years, costs about 900 rand a month.

The highly regulated South African insurance industry also is keeping insurers from discriminating based on health status. The Financial Advisory Board is the insurance regulatory body in South Africa, and every individual country in Africa is regulated by its own regulatory authority or government department. In addition, HIV/AIDS is rarely recorded as the cause of death, thus making exclusion hard to implement.

Coverage Alternatives

Old Mutual, like many insurers, recently moved away from using exclusion clauses on new products. The company, which has a large stake in the African insurance market, was among the first financial-services companies to introduce a financial advice service for people with HIV in 1996. The service includes a life cover product--OMUCARE--for those with AIDS. "We prefer not to use exclusion clauses because they also exclude conditions acquired after taking out the policy, which appear unfair: and they're very difficult to apply in practice, especially with the necessary sensitivity," said Nico van der Colff, development actuary for Old Mutual Group Schemes.

Metropolitan Life, a major player in the African insurance market, offers three alternatives for its life cover. The "no HIV-AIDS test" product enables the customer to take out a policy without testing for HIV/AIDS, and if the insured contracts the disease, the benefits of the policy are still paid out. Insureds with the "initial HIV-AIDS test" product agree to be tested before taking out a policy. If they are HIV-positive, the product is not available and they are offered a product designed specifically for people who are HIV-positive. If the insured tests HIV-negative, he or she can take out the policy and isn't required to be tested again. The "regular HIV-AIDS test" requires policyholders to take a test every five years, and if they become HIV-positive at any stage of the policy's duration, the benefits are reduced or fall away.

Faced with high-expected morality, insurers attempted to limit the expected impact by taking several measures. Most insurers have stopped offering pure life cover policies and offer only policies with a fairly large investment component. Over the past several years, however, South African life insurers have reversed the trend by starting to offer life cover policies again, said Motshumi. Extra AIDS mortality loadings are added in the determination of premiums for life cover. They are calculated using actuarial models developed to project the extra mortality caused by AIDS. Most insurers also created specific reserves to pay for the expected deterioration of mortality in policies in which the premium rates were guaranteed prior to the advent of the AIDS pandemic and in which no allowance was made for future deterioration in mortality.

Despite the higher actual mortality experience most life insurers have to bear, the recent changes have enabled most life insurers to remain profitable, Motshumi said.

Reaching Out

Various African governments are urging insurers to assist AIDS patients. In June 2003, Kenyan finance minister David Mwiraria said that AIDS should be viewed like any other insurance risk for which companies provide cover, and "underwriters should, therefore, be bold and regard the disease as a challenge and a business opportunity."

The insurance industry recently has considered several options, including a plan that would require new homeowners to buy a life insurance policy worth up to $18,700, which would make HIV-negative people subsidize the insurance rates for HIV-positive people, according to a report by the Kaiser Family Foundation.

Funeral policies that cover the whole family and pay out immediately on death are also a growing commodity. Many insurers now offer such policies, and applicants can receive coverage regardless of their health status.-Funerals are very important in the African culture, and people will spend a disproportionate amount of money relative to their income on a funeral," said Sanlam's Marais. A typical funeral in South Africa costs between 5,000 rand and 10,000 rand, or about $700 to $1,400. Sanlam's funeral policies generally provide up to 20,000 rand, or about $2,800 in coverage. No medical underwriting or AIDS testing is required for applicants; however, there's a six- to 12month waiting period for coverage to become effective.

A Helping Hand

In addition to helping insure more African citizens with HIV and AIDS, many insurers are also extending a helping hand in other ways.

Metropolitan developed AIDS Solutions, a unit solely dedicated to HIV/AIDS research and related issues. The company also created an Internet portal (www.redribbon.co.za) to offer AIDS information and developed a workplace program that includes awareness campaigns, condom distribution, ongoing education programs, voluntary counseling and testing, and a comprehensive disease management program for employees living with HIV.

The FirstRand Group, one of the largest financial institutions in South Africa and owner of the South African-based insurer Momentum, is fighting the AIDS problem with extensive corporate funding through the FirstRand Foundation and the Momentum Fund. The Momentum Fund, which devoted nearly 6 million rand, or about $858,000, to 62 projects in 2003, assists three areas: early childhood development, caring for the physically and mentally disabled, and community-based HIV and AIDS interventions. Most of the funding approved by the Momentum Fund was in support of HIV and AIDS community-care programs operating at national and regional levels and providing alternative-care strategies for people infected and affected by HIV and AIDS.

Old Mutual also has implemented several initiatives to help people with HIV and AIDS, including committing 10 million rand, or about $1.4 million, to a HIV and AIDS strategy that aims to fund nongovernmental organizations and help AIDS orphans. Nearly 12 million children in Africa are orphaned by AIDS. In the company's "Adopt" an Orphan program, employees voluntarily donate a fixed amount of their salaries to HIV/AIDS orphans. The funds are matched rand-for-rand by the Old Mutual Foundation. Approximately 600 children orphaned by AIDS benefit from the program, which generates almost 1 million rand, or about $143,000, a year.

AIDS Fact Box

* AIDS is the fourth leading cause of death worldwide, the No. 1 cause of death due to infectious disease, and has surpassed malaria as the No. 1 killer in Africa.

* In 2003, 3.2 million Africans were newly infected with AIDS; 2.3 million died; and 26.6 million are living with the disease. The life expectancy in Africa is 62 years for those without AIDS and 47 years for those with the disease.

* One out of every 10 people in South Africa has AIDS, and it's the leading cause of death in the region. About two-thirds of the world's HIV-positive population and more than 80% of all AIDS deaths occur in Sub-Saharan Africa.

* Uganda has reportedly taken the lead in AIDS prevention efforts in Africa by establishing a National AIDS Control Program in 1987 and hosting the first Phase I HIV vaccine trial in 1999.

* 14,000 people worldwide are newly infected with HIV each day, approximately 1,800 of whom are in South Africa.

* Approximately one out of every four people in Zimbabwe and Botswana has AIDS.

* 44% of pregnant urban women in Botswana are HIV positive.

* African nations spend only $165 million a year to combat AIDS. An effective and comprehensive prevention program for Sub-Saharan Africa is projected to cost $2.3 billion a year.

Sources: AIDS and Africa, CNN, LGBT Health Channel, UNAIDS, World Health Organization.

RELATED ARTICLE: On the road to improving health.

Medical aid is a limited commodity among South Africans--only about 10% of the country's total population has health insurance, according to independent trust FinMark Trust's FinScope 2003 survey of financial services. And when South African HIV/AIDS patients have access to medical protocols paid for by insurance, their outcomes significantly improve.

Medical aid was a saving grace for one African woman infected with HIM, according to Lorraine Vandenberg, head of underwriting for Pulz, a product of Momentum--a wholly-owned subsidiary of the FirstRand Group. Before acquiring medical aid from the LifeSense Group in February 2000, the patient weighed only 83 pounds; had a CD4+ cell count of 2 cells/[mm.sup.3] (the normal CD4+ cell count for a healthy adult is between 600 and 1,200 cells/[mm.sup.3]) and a viral count of 760,000 copies/mL (a viral load of 100,000 copies/mL or greater is considered high); and had repeated hospitalization stays for tuberculosis, pneumonia and meningitis.

Her condition improved significantly, however, after her medical aid paid for a highly active antiretroviral therapy to treat the disease, in addition to providing her with counseling on how to properly use the medication. Today, the woman's weight, cell count and viral load are normal, and she's back to work and hasn't had any infections or been hospitalized in the past several years.

Providing Cover

Medical aid in Africa is provided by medical schemes--private health insurance for medical expenses. In the past, most medical schemes either limited or excluded HIV/AIDS and related conditions from benefits. High health-care costs associated with the disease often drove these exclusions. In 1999, 87% of schemes posted underwriting losses. Twenty-one 1% premium increases were enacted in 1998, according to an article entitled "The Introduction of Compulsory Cover for HIV/AIDS Through Medical Schemes" by Bruce Sheppy of Bruce Sheppy and Associates, an international health-care consultancy firm. In addition, rising hospitalization costs accounted for more than half of the total costs.

Recent legislation is attempting to ensure that more coverage is available. In 1998, the Medical Schemes Act was passed to eliminate risk-rating sick members or excluding bad risks. Medical schemes can't discriminate based on age, medical history and health status, and contributions may be determined only on the basis of income level and/or number of dependents. The act, which is governed by the Council for Medical Schemes, stipulates prescribed minimum benefits for psychiatric care, HIV/AIDS, attempted suicide and sexually transmitted diseases--conditions that were previously often excluded from private benefit packages. Schemes are required to provide and pay for treatment at public or private sector hospitals as opposed to outpatient or primary care facilities.

Since January, the act requires that medical schemes provide medical coverage for full management of 25 chronic conditions. While HIV doesn't appear on the initial list, it's anticipated that it will be added in 2005, thus obligating schemes to cover antiretroviral therapy for HIV-infected beneficiaries, said Dr. Leighton McDonald, executive director of Qualsa Health Risk Management Specialists, a health risk-management organization.

The maturation of the HIV/AIDS pandemic has been an advantage to medical scheme members who need coverage for the disease because it's more cost-effective to provide treatment for the infection than to cover the costs of hospitalization for the complications associated with AIDS, said McDonald. "In addition, the costs of antiretroviral therapy have been reducing constantly over recent years, making this more affordable for the majority of medical schemes, so access to treatment has improved."

A study by the Center for Actuarial Research and the University of Cape Town and the Treatment Action Campaign revealed a different situation. The study found that while medical schemes provide extensive coverage for HIV support services, including counseling, education, testing and information, treatment is less adequately covered. Instead, there is more emphasis on prevention than treatment, and schemes cover only some costs of antiretroviral medicines, post-exposure prophylaxis against HIV infection and treatment to prevent mother-to-child transmission.

This isn't the case at South African-based insurer Momentum, which provides medical aid to those with the disease. Momentum is a wholly-owned subsidiary of the FirstRand Group. Their medical aid offering, called Pulz, provides coverage for antiretroviral therapy and hospitalization costs. For example, a high-end Pulz option provides 30,000 rand, or about $4,300, of hospital coverage in a private facility and 15,000 rand, or about $2,200, for antiretrovial drugs. Members also have access to personal case managers at a 24-hour call center, who offer nutrition advice, help family members and provide medication information.

Although coverage is capped, the Pulz options don't include any exclusions for AIDS-related care or require an HIV test. Applicants don't have to list their HIV/AIDS status on their application, but they have two months to notify the company of their status and register on its HIV program, Vandenberg said.

Similar to the spike in group life rates over the past decade, the HIV/AIDS epidemic is also driving increased medical aid premiums. Momentum has had to price its products in line with the significant rise of hospitalization-related costs generated from HIV/AIDS patients, Vandenberg said.

A Glimmer of Hope?

A national program to provide antiretroviral drugs is expected to be rolled out to treat about 25% of the country's HIV-positive population by 2008. Without antiretroviral drugs, the life expectancy for those with HIV in Africa is only eight to 10 years.

While these drugs are expected to give AIDS patients a new lease on life, some African leaders are skeptical that even a 80% cut in price will be enough to make the drugs, which can cost up to $20,000 a year, affordable in the continent. In addition, Metropolitan Life--a major player in the African insurance market--believes that unless antiretroviral treatment becomes more wide spread, the cost of providing health, life, disability and funeral policies could double between 2000 and 2005 and triple by 2010.

"Most African countries have had spectacular success with specific programs providing care and treatment in specific settings. However, national rollouts have not been very successful, mainly due to the lack of resources, and in particular the lack of trained health-care personnel," said Connie Motshumi, general manager, stakeholders relations of the Life Offices' Association of South Africa, an association of registered long-term insurers conducting business in the country.

But all hope is not gone. Motshumi said that as capacity is created to support the universal access to care and treatment, things will begin to improve.

Also, the impact of the national antiretroviral rollout is expected to have a positive impact on mortality and morbidity experience in the group insurance market, said Dave Strugnell, head of actuarial research and development for Momentum Collective Benefits. "The extent of this impact will naturally depend on the pace and comprehensiveness of the rollout, the level of participation in the program and the level of compliance with treatment regimes." But time will tell. Thus far, only one of nine provinces has rolled out the program to any significant degree, he added.

Pharmaceutical companies are also becoming involved. In April, Swiss health-care group Roche Holding AG announced that it was cutting the cost of AIDS drugs in poor countries, including some African countries. The company already sells its Viracept and Invirase drugs at no profit to Sub-Saharan African and in other countries that the United Nations defines as least developed.

RELATED ARTICLE: Changing times: the AIDS epidemic through the years.

1926: Some scientists believe HIV was spread from monkeys to humans between 1926 and 1946. Some recent research shows that HIV may have spread from chimpanzees to humans as early as 1675 but didn't establish itself as an epidemic strain in Africa until about 1926.

1959: The first proven AIDS death in Africa occurred when a man with HIV-1 found in blood samples died in the Congo.

1969: First known case of HIV in the United States appeared when a teen prostitute with Kaposi's Sarcoma and HIV died.

1978: Homosexual men in the United States and Sweden and heterosexuals in Tanzania and Haiti began showing signs of what was later called AIDS.

1981: The Centers for Disease Control declared HIV an epidemic.

1982: The CDC linked the new disease to blood, and the term "AIDS" was used for the first time.

1984: A heterosexual AIDS epidemic in Africa was revealed.

1B85: AIDS cases were reported in every populated continent in the world.

1987: Zidovudine (AZT, Retrovir) was the first drug approved to fight HIV itself and was marketed for use by people with AIDS. Also, Africa's first community-based response to AIDS--the AIDS Support Organization--was formed in Uganda.

1999: The World Health Organization reported that AIDS had become the leading cause of death in Africa, killing more people worldwide than any other infectious disease.
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Title Annotation:AIDS in Africa
Comment:Insuring hope: insurance for individuals with AIDS in Africa is hard to come by, but carriers are making changes to help the millions infected with the disease.(AIDS in Africa)
Author:Chordas, Lori
Publication:Best's Review
Geographic Code:60AFR
Date:Jun 1, 2004
Words:3959
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