SA’s biggest public sector union is urging the Government Employees Medical Scheme (Gems) not to increase premiums next year, saying membership poses an increasing financial burden for public servants.
Medical schemes are designing their benefits and contributions for 2026, which must be submitted to the Council for Medical Schemes (CMS) for approval by end-September.
“Our members have been stretched and suffocated financially by Gems and there is no need for any increment,” said National Health and Allied Workers Union (Nehawu) spokesperson Lwazi Nkoloni. Nehawu represents about 270,000 of the state’s 1.3-million employees.
If Gems pressed ahead with an increase, it should be no more than consumer price inflation, he said. The Reserve Bank projects inflation will be 3.3% in 2026.
After implementing historically low contribution increases during the Covid-19 pandemic, Gems hiked premiums by 9.5% in 2024 and 13.4% this year, to the dismay of unions.
It built up big reserves during the height of the pandemic, which it then ran down to hold down contribution increases in 2022 and 2023. Contrary to expectations, medical scheme industry expenditure plummeted during the pandemic, as people deferred nonurgent care in an effort to reduce their risk of contracting the virus.
The 13.4% increase implemented by Gems this year had created financial strain for Nehawu members struggling with the high cost of living, said Nkoloni.
Members were concerned that switching to Gems’ cheapest option, Tanzanite, would leave them with fewer benefits, he said.
“Gems has over the years become a financial burden on public servants with the yearly increments. It has totally moved away from what it was essentially created for, which was to ensure that it provides affordable medical cover for public servants,” he said.
Gems was created in 2006 with generous state subsidies and benefits, in a bid to expand medical scheme membership to people who had previously been unable to afford cover. Its definition of dependants was much broader than other schemes and the government offered a bigger subsidy to employees who chose to join Gems than to those who opted for other medical schemes.
Gems should trim its expenditure by cutting back on marketing and insourcing services, said Nkoloni. “Equally the exorbitant board fees are something that should be done away with,” he said.
Gems spent R14m on trustee remuneration in 2023, more than any other scheme, according to the CMS’ latest industry report. Gems’ 10 trustees received on average R1.4m each in 2023, making them the industry’s highest paid trustees.
The Public Servants Association (PSA) also took issue with Gems’ recent contribution increases and urged the scheme to institute lower hikes next year.
“It is always recommended that the Gems increase be in line with the annual salary increase of public servants, and not way above their salary increases,” said PSA spokesperson Reuben Maleka. The government awarded public servants a 4.7% pay increase this year.
Failing that, Gems should implement contribution increases no higher than medical inflation, said Maleka.
Medical inflation is usually several percentage points higher than consumer price inflation.
The PSA also wants the state to give employees greater choice and apply the subsidy to Gems and an additional two or three schemes, he said.
“Gems is somehow not well managed and that will always haunt public servants to pay more for poor management of the scheme,” he said.
Gems principal officer Stan Moloabi said on Monday that member interests had to be balanced against the financial sustainability of the scheme.
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