The Government Employees Medical Scheme (GEMS) has revealed a funding shortfall of roughly R2 billion after healthcare claims outpaced member contributions in 2025.
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The Government Employees Medical Scheme (GEMS) has revealed a funding shortfall of roughly R2 billion after healthcare claims outpaced member contributions in 2025, underscoring growing financial pressure on the scheme.
According to GEMS, the scheme paid out more than R67 billion in claims last year, while receiving about R65 billion in contributions, a gap that has raised concerns about long-term sustainability.
GEMS Board of Trustees chairperson, Dr Nomzamo Tutu, stated that the imbalance reflects broader pressures in the healthcare sector, where inflation is rising significantly faster than consumer inflation.
“For several years, GEMS has consciously leveraged its robust financial reserves, generating more than R10 billion in direct savings for members, thereby shielding them from the full impact of healthcare inflation,” she said.
The admission from GEMS comes amid protest action by several labour unions over the medical aid scheme contribution hike for 2026.
GEMS had initially proposed a 9.8% contribution increase for 2026 but later revised this to 9.5% after an outcry from unions. Unions, however, have also rejected this increase as being unjustifiable and have embarked on protest action.
The scheme confirmed it has reviewed a memorandum of demands submitted by organised labour in February and has committed to further engagement. GEMS acknowledged the financial strain facing public servants and affirmed the right of members to protest within the legal framework.
To address tensions, the scheme has proposed urgent bilateral talks with union representatives in the final week of March. These discussions will focus on planned contribution increases for 2026 and seek mutually workable solutions.
GEMS said it remains committed to constructive and transparent engagement while balancing its fiduciary duty to safeguard the scheme’s financial sustainability.
In response to member concerns, the scheme has also opened a special option selection window for those on the Tanzanite One plan. Until April 9, 2026, members on this option designed for employees in salary levels 1 to 5, may switch to alternative benefit options.
The scheme added that it will continue working with the Public Service Co-ordinating Bargaining Council to formalise a structured engagement process with organised labour.
Despite financial pressures, GEMS highlighted its governance track record, noting 18 consecutive unqualified audits since inception and a zero-tolerance stance on fraud and corruption. Non-healthcare expenditure remains low at 5.2%, among the lowest in the industry.
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