The good news: A sustainable and affordable GEMS

GEMS is required by law to build reserves (funds) equal to 25% of annual contributions. The Medical Schemes Act requires these reserves to be held so that medical schemes can be protected from unexpected, negative circumstances (such as unexpectedly high claims). These reserves can only be built through increasing contributions; this means some portion of members' contributions is used to build reserves (rather than just for the payment of claims).

As new members join GEMS, the Scheme's total annual contributions, and the reserves it needs, increase. Notably, the migration of the pre- 1992 pensioners to GEMS in 2012 significantly weakened the Scheme's reserves, because these members did not bring reserves with when they migrated from Medihelp and joined GEMS. 

The Scheme therefore approached the National Treasury to ease the pre-1992 impact on the Scheme's finances. Commitment of financial relief was confirmed in November 2012 - after contributions for the 2013 benefit year were determined and approved by the Council for Medical Schemes. Therefore, with the commitment received from the National Treasury, the increase in reserves during 2013 has improved. In our continued effort to help members whenever possible, GEMS increased all salary band boundaries by 7% from 1 January 2013, members who received salary increases during 2012 did not have to pay higher contributions to GEMS as a result of the adjustment.