Cosatu’s public service unions have threatened to take on the Government Employees Medical Scheme (Gems) over “exorbitant” tariffs, after contributions rose 9.8% in 2026.
The unions say they will also push to have the scheme’s executives declared delinquent directors as a punitive measure for alleged financial mismanagement.
Briefing the media in Johannesburg on Monday, the unions said they will embark on provincial pickets at Gems regional offices on Tuesday, culminating in a national day of action at the scheme’s head office in Pretoria on Thursday. Cosatu affiliates will also activate a process to allow public servants who wish to join alternative medical aid schemes to do so while retaining their full government subsidy.
“This will happen immediately in the event that Gems shows some resistance to our demands,” said Simon Hlungwani, Cosatu’s joint mandating committee convener and president of the Democratic Nursing Organisation of SA (Denosa).
“Let’s see if Gems is willing to collapse itself. We will pull the carpet they are standing on and they will fall. We have the power. We will use our muscle power, our negotiating power and legal power to fight them.”
Gems is South Africa’s largest restricted medical scheme and is only available to public servants and their dependants. Membership is heavily subsidised by the state, which pays up to two-thirds of members’ monthly contributions.
It has come under fire from unions in recent years over its contribution hikes, which increased by a weighted average of 13.4% in 2025 and 9.8% in 2026. By contrast, Discovery was to hike top, low-end medical aid plans by 7.9% in 2026, Sizwe Hosmed by 19.15%, effective from November 1 2025 to December 31 2026 and Bonitas Medical Fund by 8.8% for 2026, effective from January 1 2026. The inflation rate is hovering around 3.6%.
In January public service & administration minister Mzamo Buthelezi told parliament the government would engage with the trustees of Gems over its “unaffordable tariffs”.
‘Financial mismanagement’
On Monday, Hlungwani said the unions — calling for the withdrawal of the 9.8% increase — wanted to hold the board and management of Gems accountable for “its financial mismanagement”.
“We believe the accounting authority is failing in its fiduciary duties by allowing the exorbitant increases way above what even the Council of Medical Schemes [CMS] would have recommended,” he said.
The CMS recommended an increase of 3.3% for 2026 but Gems “ignored this guidance and imposed an increase 6.5 percentage points higher, demonstrating a disturbing disregard for workers”.
“The sitting of more than 50 meetings in a year where each board member claims a full sitting board fee, even in the face of poor performance of the scheme, is a scandal that requires investigation,” Hlungwani said.
Gems spent R14m on trustee remuneration in 2023, more than any other scheme, according to a report by the CMS. Gems’ 10 trustees received, on average, R1.4m each in 2023, making them the industry’s highest-paid trustees.
Hlungwani said a huge share of Gems’ financial gain goes to Metropolitan and Medscheme, “the two companies entrusted to manage the scheme”.
Cosatu proposed to Gems for self-administration to lower costs but this was not entertained by the scheme because “they are arrogant”.
Gems principal officer Stan Moloabi earned a salary that is double what President Cyril Ramaphosa earns.
On Monday, Hlungwani said Cosatu affiliates including Denosa, Police and Prisons Civil Rights Union (Popcru), the South African Democratic Teachers Union (Sadtu), the Public and Allied Workers Union of South Africa (Pawusa), South African Emergency Personnel’s Union (Saepu), the South African Medical Association Trade Union (Samatu), and the National Education Health and Allied Workers Union (Nehawu) would embark on a three-month programme of action challenging the increases and governance failures in Gems.
Nehawu is South Africa’s biggest public sector union, representing about 270,000 of the state’s 1.3-million employees.
The 9.8% increase constituted a “staggering 23.3% increase over two years”, while public servants received only a 5.5% salary adjustment in 2025/26. Hlungwani said medical aid costs rose far above wages and inflation was “real wage erosion and a direct attack on workers’ take-home pay”.
Gems was created through public service co-ordinating bargaining council resolution 1 of 2006 to provide “affordable, solidarity-based healthcare, especially for lower- and middle-income public servants. It was never intended to operate like a profit-driven commercial scheme,” Hlungwani said, noting it had “unfortunately abandoned this mandate”.
Cosatu public service unions’ legal team would investigate all possibilities for “either an effective alternative or a drastic shape-up of Gems”.
Popcru second deputy general secretary Boitumelo Pheleo said: “We have a problem with how the scheme is administered. Members are paying more because of incompetence at Gems. We have engaged the board and raised these issues and we have been met with arrogance. Some stokvels are better run than Gems.”
In a statement, Gems said the increases were necessary to protect the scheme’s financial sustainability for the benefit of its members. “As a scheme, we call for continued engagement and consultation with organised labour to find and implement solutions.
“We remain open and fully committed to constructive dialogue and will share information transparently so that we both work towards practical and sustainable solutions. We firmly believe that meaningful engagement is the most effective way to resolve concerns and strengthen trust,” Moloabi said. Additional reporting by Tamar Kahn
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