Public Outcry: GEMS' shocking 9.8% medical aid hike ignites union fury and financial fears

The Government Employees’ Medical Scheme (GEMS) has informed angry public servants’ representatives that it cannot unilaterally reverse the 9.8% increase in 2026 member contributions without approval from the Council for Medical Schemes (CMS).

However, unions are still unhappy with its offer to decrease the contributions to 9.5% only in February next year.

The 9.8% increase has already been approved by the CMS and has been processed and can only be undone during the course of next month (January) should the council approve.

According to GEMS, its board of trustees has resolved that the previous recommendation of the 9.8% increase from January 1, 2026 switch to 9.5% if approved by the CMS is the only implementable option that it can put forward to the Public Service Coordinating Bargaining Council (PSCBC).

GEMS noted that it also has a relatively minor impact compared to the scenario applying 9.5% throughout the months of 2026 due to the small impact of one month’s contributions on the annual contributions raised.

“If a 9.8% increase is applied in January 2026 and 9.5% (relative to 2025 rates) thereafter, the scheme will be below the minimum requirement of [a] 25% reserve ratio at the end of 2028,” the GEMS told the PSCBC earlier this month.

According to the scheme’s presentation to the bargaining council, a corrective increase of 9.8% in 2027 and 2028 will be needed to return GEMS to the minimum required reserve ratio by the end of 2028 but this proposal was rejected.

“Practically, this is the only option that is implementable because it strikes a balance between member affordability and scheme sustainability, while also ensuring that the scheme reaches the minimum legislative requirements by 2029,” GEMS explained.

GEMS also warned that if a 9.5% contribution increase is applied consistently from January 2026 to 2029, it will, after dipping below the 25% level, only reach the minimum statutory requirement by 2029.

The scheme added that a corrective increase of 9.8% would be required in both 2027 and 2028 to achieve the 25% requirement by 2028. By law, medical aid schemes are required to have a 25% solvency rate.

“The challenge with this proposal is that it is impossible to implement as regulatory requirement may not be obtained by the end of the year 2025,” insisted GEMS.

This could see a higher corrective increase of 10.1%, which would be required in both 2027 and 2028 to achieve the 25% requirement by 2028.

“This proposal is also impossible to implement, as regulatory requirements may not be obtained by the end of 2025,” it further cautioned.

The Public Service Association warned its members that whatever would be agreed upon at the PSCBC, would still be subjected to the approval by the CMS and that in all likelihood the 9.8% will be implemented in January.

Cosatu affiliate, the National Education, Health and Allied Workers’ Union (Nehawu), has also rejected the proposed 9.8% increase, saying it ignored the fact that in the last two years, they have increased member's contribution by over 25% and disregarded financial challenges faced by public servants.

The union called on GEMS, the Department of Public Service and Administration and the National Treasury to halt the implementation of the decision to increase member contributions and rather focus on ensuring that the scheme remains capable of serving the needs of workers and does not become an instrument of accumulation by capital and those who administer it.

“As Nehawu, we are resolute that this decision to increase members’ contribution will not go unchallenged,” the union threatened.

loyiso.sidimba@inl.co.za