GEMS - medical aid for government employees says it is on its way to recovery after a weak year

How unwell the medical scheme for government employees was last year, is evident in its most recent financial report.

The solvency ratio of the medical scheme for government employees (GEMS) dropped to under 4% in September last year. Medical schemes are required by law to have enough reserve funds so that unexpected high claims can be covered and doctors and hospitals can be paid.

In accordance with law, schemes should have 25% of its annual contributions in reserve.

GEMS reported in its annual financial results that it experienced an "unexpected and unusual increase in claims."

Dr Gunvant Goolab, Principal Officer of GEMS, said yesterday that the sudden rise in claims is connected to a sharp increase in hospital admissions.

The claims that GEMS paid were R900 million more than the budget allowed for. This resulted in the scheme having a shortage of R485,7 million after claims and other expenses were paid, and its income from investments were taken into account.

A scheme must budget so that its contribution increases are enough for a surplus in order to build the reserve fund and meet the requirements of the compulsory solvency ratio.

"Now, we have enough money to pay all claims that come in on a monthly basis," said Goolab.

Nellie Brand-Jonker | 06 July 2017