Ever growing GEMS posts low contribution increase to boost reserves

Johannesburg, 27 October 2009

South Africa's second largest medical scheme, the Government Employees Medical Scheme (GEMS), today announced an average contribution increase of 10,8% for 2010 alongside a range of attractive new benefit enhancements.  Despite a recessionary economic climate and a need for fiscal prudency, the 2010 contribution rate increase is almost 0,50% lower than that of the previous year. 

Commenting on the announcement, Dr Eugene Watson, Principal Officer of GEMS said that as in the past the scheme has fulfilled its mandate of taking every effort to deliver the finest possible healthcare benefits at the most affordable rates to its members. GEMS members can choose from five different benefit plans, namely Onyx, Ruby, Emerald, Beryl and Sapphire.  These benefit plans are between 10% to 25% less expensive, and in most cases offer increased benefits, when compared to other medical schemes in the market.

"While members will be paying more for their healthcare cover, a range of innovative new member benefits are being introduced at the same time," said Dr Watson. "On our two lower cost options, Sapphire and Beryl, a dramatic shift has occurred as a result of the introduction of several innovative and new member benefits. This has proved highly advantageous for hard-pressed members who are now paying an additional 9% but are actually receiving an extra 10% more in benefits.  A series of attractive new benefits were also added to the popular Ruby, Emerald and Onyx options where benefit limits were also raised by 2.5%."

"The first 5,9% of the GEMS contribution increase comes as a result of the statutory obligation for the Scheme to increase its reserves to 25% in 2011.  The real operational increase for GEMS is therefore closer to 4,9%," explained Dr Watson.  He added that being one of South Africa's youngest and fastest growing medical schemes meant that bolstering the Scheme's reserves would remain a focus point for the Board of Trustees. 

"Against a background of increased financial pressures on the average South African, and therefore on many of our members, we have made every effort to balance the need to build the financial reserves of the Scheme while providing GEMS members with improved benefits at affordable rates" added Dr Watson.

"We are cognisant of the fact that everyone is compelled to stretch their rands as far as possible.  That is why members on options such as Sapphire and Beryl can expect to pay between R21 and R38 more for a family of three once their subsidies have been taken into consideration.  Rand value increases on some of our other options range between R142 to R459 for a family of three depending on the option selected.  However, we have increased the income bands applicable to all benefit options by 10 % and many members may find that they actually move "down" in terms of income bands making membership of GEMS more affordable. " explains Dr Watson.

Watson went on to say that "the GEMS 2010 offering is best viewed in isolation as the benefits and contributions have been priced separately. Comparison between the 2009 and 2010 benefits would greatly undermine the extent to which the Scheme has transformed itself. In essence, a  highly competitive contribution will be charged for a much greater benefit, with limited nominal increases when compared to 2009".

One of the more significant changes that Sapphire and Beryl members can look forward to in 2010 is the introduction of a new, comprehensive network of healthcare service providers which is known as the GEMS Network. This network enhances access by members to more providers and will serve as the platform through which the Scheme's preferred and designated provider arrangements will be managed.

While several different benefit enhancements have been made on each of the five GEMS options, the highlight for Sapphire and Beryl members is that they are now offered a private hospital maternity benefit that includes pathology and radiology.  In addition, new mental health benefits including treatment by psychologists were introduced on the Sapphire and Beryl options while unlimited primary healthcare benefits are retained.  On Ruby, Emerald and Onyx the in-hospital non-Prescribed Minimum Benefit (PMB) day case benefit is no longer pro-rated, while this limit on each of these options has been raised to R10 760. The benefit for medical and surgical appliances, on the other hand, has been doubled for 2010.

Members on Emerald will enjoy the new Supplementary block benefit which provides members with greater access to optical and dental benefits amongst others. In response to member enquiries and suggestions the basic dentistry limit on Emerald has been tripled for 2010.

The announcement regarding the benefit enhancements and member contribution increases was made at the second Annual GEMS Symposium hosted at Sibaya Casino in KwaZulu Natal, with the Minister of Public Service and Administration, Richard Baloyi, in attendance.

In his address, the Minister said that GEMS has made significant progress towards meeting and exceeding its mandate and its annual membership growth rate continued to exceed expectations.  "The 2010 benefit offering confirms the Scheme's responsiveness to members as many of the new benefits on offer in 2010 emanate from member requests received during the past year.  Despite these enhanced benefits the monthly contributions remain highly competitive.  Verification of the value-for-money offering is the fact that less than 6% of GEMS members changed their benefit options during December 2008 while 72% of those members who chose to change their option elected to purchase more comprehensive cover" he said.

The Minister also announced that GEMS had already grown its membership base by an impressive 100 000 members in 2009.  "The scheme now has more than 400 000 principal members and provides healthcare cover to well over a million individuals which means that it now provides healthcare over to 2% of all South Africans. What is more, over one-third of all eligible public service employees are now enrolled on GEMS and in some provinces more than 50% of employees are enrolled on GEMS.  Well over 50% of GEMS' members previously did not access the employer subsidy for medical schemes.  This means that in excess of 500 000 people who did not previously have healthcare cover now do."

Prof. Richard Levin, Chairperson of GEMS, announced that the re-issued tenders for four of the Scheme's operational services had been awarded following a transparent and fair procurement process.  Medscheme retained the tender for rendering managed healthcare services and in addition is now also responsible for the healthcare provider network management of the scheme. Medipost retained the tender for the provision of chronic medicine to scheme members by way of a centralised dispensary/courier pharmacy. Aid-for-Aids retained the contract for rendering HIV disease management services while Qualsa was awarded the new contract to render strategic managed healthcare services to all registered benefit option of the scheme.

Commenting on what he referred to as an ‘exceptional year in terms of membership growth and overall achievements' Prof Levin said:  "Member growth, financial sustainability and efficient service are without doubt important, but it is the Scheme's governance structure that ultimately provides both members and the employer with assurance that their interests are being protected on a sustainable basis."

"GEMS remain a best practice example of good governance in a medical scheme which continues to exceed every expectation.  In terms of the member growth rate it has no equal in the South African healthcare environment, and yet despite its considerable growth member satisfaction levels remain as impressive as ever," concludes Prof Levin.
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