Private hospital care for all public servants
• Expansion of cover for all members of Government Employees Medical Scheme to standardise core benefits in line with National Health Insurance policy
SA’s biggest medical scheme for public servants plans to extend private hospital cover to all members from January as it seeks to standardise core benefits in line with government policy on National Health Insurance.
SA’s biggest medical scheme for public servants plans to extend private-hospital cover to all members from January as it seeks to standardise core benefits in line with National Health Insurance policy.
The Government Employees Medical Scheme (Gems) move to expand core private hospital cover is in line with the Competition Commission’s health market inquiry, which recommended an industry-wide standard benefit package. It also has the potential to reduce the load on the overstretched public-health system by using spare capacity in the private-hospital market.
The development is expected to make medical scheme membership more attractive to lower-paid civil servants, most of whom are not covered, Gems principal officer Stan Moloabi said at a briefing on Thursday.
Gems provides cover for 720,000 principal members and dependants. Public servants who join Gems enjoy generous subsidies linked to their income, but until recently, low earners on salaries up to grade 5 were restricted to the public sector for all hospital admissions except for births.
This year, Gems began to provide private hospital cover for a limited number of admissions, which it plans to expand. Members must stick to strict referral rules and will be restricted to a hospital network.
The average salary for a public servant on grade 5 was R258,312 in 2018-2019, according to the 2019 medium-term budget policy statement.
Only 47% of public servants on salary bands 1 to 5 belonged to medical schemes, said Moloabi. “Our target is to cover all of them,” he said. There are 1.1million public servants, who belong to a range of medical schemes, including Polmed for the police and Parmed for MPs and members of the judiciary.
Gems was able to expand benefits for members as it has a significant surplus, due largely to recently introduced underwriting. “There is no additional cost to the fiscus,” said Moloabi.
The Medical Schemes Act protects schemes from antiselection in which people join only when ill or expecting big health bills. The act allows schemes to use underwriting measures, such as late-joiner fees and waiting periods for preexisting conditions, to deter this.
Gems introduced underwriting only after its cash crunch in late 2016, when its solvency levels fell to less than 4%, well below the statutory requirement of 25%.
Underwriting saved Gems R1bn in 2018, says CFO Karyna Pierce. Its solvency level was 26.8% at the end of September.
Gems announced a weighted average premium increase of 7.7% for 2020, lower than SA’s biggest open medical scheme Discovery Health Medical Scheme, which has announced a weighted average rise of 9.5% next year. Momentum Health will increase premiums by a weighted average of 8.2%, while Bonitas plans a hike of 9.9%.
OUR TARGET IS TO COVER ALL [1..1MILLION] OF THEM ... THERE IS NO ADDITIONAL COST TO THE FISCUS