Council defends 9.5% Gems price hike despite affordability concerns

The Council for Medical Schemes (CMS) has defended its decision to keep the Government Employees Medical Scheme’s (Gems) contribution increase at 9.5%, arguing that a lower increase would place the scheme’s long-term financial health at risk and ultimately hurt members.

This comes after trade unions, including the Public Servants Association (PSA) and Cosatu, opposed the 9.5% hike, arguing that it drastically outpaced recent public sector wage increases.

The regulator said it had carefully considered Gems’ request to reduce the increase to 7.5%, but found that the proposal would not adequately address the scheme’s financial and solvency challenges.

CMS senior manager for communication Stephen Monamodi said the council’s primary responsibility is to ensure medical schemes are both affordable and financially sustainable while protecting members’ interests.

“The decision to retain the previously approved 9.5% contribution increase reflects the Rregistrar’s responsibility to balance affordability, financial sustainability, and member protection,” he said.

“The objective is to reduce the risk of future solvency deterioration, limit reliance on reserves to fund operational deficits, and support the long-term interests of current and future beneficiaries.”

Monamodi said the registrar considers several factors before approving contribution increases, including actuarial reports and financial projections.

“These assessments are undertaken to ensure that contribution levels are fair to members and consistent with the requirements of the Medical Schemes Act,” he said.

“Throughout the assessment process, the CMS engaged with relevant stakeholders and considered the views placed before the registrar. While stakeholder participation remains important, the registrar’s decision is ultimately guided by the statutory requirements of the Medical Schemes Act and the obligation to protect beneficiaries’ interests,” Monamodi said.

Although the regulator acknowledged the financial strain facing government employees, Monamodi said reducing the increase would only postpone the scheme’s financial challenges.

“The proposed amendment reducing the contribution increase to 7.5% is not fair to members, is inconsistent with the act, and does not adequately support the Scheme’s ongoing financial soundness and sustainability,” said CMS registrar Dr Musa Gumede.

According to Monamodi, approving the lower increase would likely push current financial pressures into future years, forcing the scheme to introduce even steeper contribution increases later.

“While the CMS recognises and supports efforts to improve affordability for members, affordability considerations must be balanced against the statutory obligation to maintain a financially sound medical scheme.

“The registrar is required to ensure that contribution levels are sufficient to meet expected claims and expenses and support the scheme’s long-term sustainability,” he said.

He added that retaining the 9.5% increase would help prevent the deterioration of the scheme’s solvency.

“CMS further notes the GEMS media statement published on 30 June 2026, accepting and abiding by the registrar’s decision to keep contribution increases at 9.5% and committing to work on future contribution adjustments that balance the quest for affordability with financial sustainability,” Monamodi said.

He said the regulator was encouraged by Gems’ commitment to strengthen cost-containment measures and improve operational efficiency.

Sowetan