The Council for Medical Schemes is proposing consolidation of all medical schemes for public servants into the Government Employees Medical Scheme (GEMS) in line with government policy on National Health Insurance. Business Day reports that the proposal is contained in a discussion document released for public comment and is likely to run into opposition from industry players and public servants alike. The state contributes significantly to public servants’ medical scheme contributions. And, the report says, unionised workers are likely to resist moves they see as a threat to their current benefits.
State sector schemes make up about 30.3% of the industry and include Polmed for the police and Parmed for MPs and judges. The council identified 10 schemes that could be amalgamated with GEMS, including those of state-affiliated entities such as the SABC and Rand Water. It said that consolidating public sector medical schemes with GEMS offered potential savings; a larger scheme would have more negotiating power with health-care providers. GEMS was best placed to absorb other public sector schemes because of its size and relatively young and healthy membership, the council said.
The report says GEMS had 1.833m beneficiaries at the end of 2016, providing cover to more than half (56.8%) of all eligible public servants. The council said it was aware that many state employees might be reluctant to move to a new scheme but it was important to press on as it would provide an example to private sector schemes.
It suggested that troubled Transmed, for staff and pensioners of state-owned rail company Transnet, could be used as a test case for “fast-tracking engagement strategies”.
Transnet had a high pensioner ratio, with a large proportion of older and sicker members, and had to reduce benefits and raise contributions to cover their needs, Insight Actuaries & Consultants joint CEO Barry Childs said in the report. Merging public servants’ medical schemes with GEMS was likely to be difficult, “but not impossible”, he said. “I can’t see Polmed easily rolling into GEMS: it is a business in and of itself.”
The council proposed that non-state schemes consolidate, and then, like GEMS, reduce the number of benefit options. Acting council registrar Sipho Kabane said consolidating medical schemes would improve their sustainability and was an important step towards realising the government’s universal health-care goal of having a single payer for health services. “We are just doing the technical work to get the discussion going,” he said.
But, the report says, Wits University professor Alex van den Heever panned the council’s latest proposals, saying they were at odds with the health market inquiry’s interim findings, published in July. “There is plainly no understanding of the health market inquiry report. This proposal will drive up costs in the private system by removing all semblance of competition. You do not enhance efficiencies by consolidating purchasers. You destroy them by creating un-regulateable monopolies,” he is quoted in the report as saying.Business Day report