New teachers are learning to live with Gems, the Government Employees’ Medical Scheme. They have no choice. Membership is compulsory for recent state recruits, unless they are members of their spouse’s scheme. What about teachers covered by other schemes? Are they migrating to the new offering? Unfortunately, no clear-cut answer is possible yet.
The state scheme was registered in January 2005, but only became fully operational a year later. Since then Gems has made major gains. With more than 130 000 principal members and more than 350 000 lives covered, it is already the fourth-largest scheme in the country. If this rate of growth from a zero base is maintained, it will be the largest single medical aid scheme in less than five years.
It has been estimated that the government has an annual staff turnover of 75 000. This creates a constant stream of new recruits every one a compulsory Gems member.
As the scheme has been going for a year and a half, more than 110 000 principal members could have been compulsorily enrolled, rather than wooed by Gems’ features and cost efficiency.
Many first-time recruits are young and mobile. Turnover rates among recruits like these are generally high. This suggests constant “leakage” and will affect Gems’ membership base. In a worst-case (albeit implausible) scenario, the 75 000 who join might be matched by 75 000 who leave.
To achieve continued strong growth, Gems will have to supplement the intake of new recruits with successive waves of new converts, who migrate from existing schemes.
At inception, Gems hoped to attract 500 000 members from the 1,1million state employees. Of special interest were the estimated 380 000 government workers who were (and maybe still are) on no scheme at all. It is thought that the failure of private-sector medical schemes to enrol these members in the past decade or so was one of the reasons for the establishment of Gems. National coverage has stalled at about seven million for more than a decade. The coverage blind spot is particularly evident among those earning R2 500 to R6 500 a month.
Those with medical aid belong to more than 50 schemes across various sectors. (The rate of cover by existing schemes is particularly high among teachers.) As costs and benefits vary from plan to plan, an overall comparison with Gems is difficult.
Five different benefit plans are available through Gems: Sapphire (the lowest-cost offering), Beryl, Ruby, Emerald and Onyx. Each covers hospitalisation, various levels of chronic medicine benefit, day-to-day service by providers, doctor and specialist visits, provision of acute medicines, basic and specialised dentistry and optical services. All offer an HIV/Aids benefit and an emergency assistance benefit.
Emerald appears to be the most popular. It offers a “block benefit” for out-of-hospital expenses. Separate benefits are available for medicine, pathology, radiology, optical services and specialised dentistry. Emeralds chronic medicine limits are R6 000 per beneficiary or R12 000 per family.
To give credit where credit is due, Gems did not duck the affordability challenge. For example, a single member earning less than R2 500 a month who opts for Gems’ basic Sapphire plan pays just R348 a month. On the Emerald plan, the monthly member fee (including employer subsidy) for a member earning less than R6 000 a month is R820.
To help manage costs, extensive networks of preferred providers have been established.
Gems has some advantages in the quest to keep rates down. It can anticipate a constant supply of new, mainly young recruits. Younger members generally claim less than older ones. Existing schemes might have a much higher proportion of older members.
Owing to its potential size, Gems is able to obtain larger discounts from health services providers and administrators than those secured by its competitors.
Though “leakage” from the pool of new members might slow the process, Gems’ growth into a major industry player is only a matter of time. It can, therefore, use economies of scale and burgeoning negotiating power to help manage costs.
Teachers can check the Gems website (www.gems.gov.za) to compare prices and benefits against those offered by their existing schemes.
Taurayi Chinowona is head of integrated healthcare at Lekana Employee Benefit Solutions, a specialist consultant on healthcare efficiencies at public enterprises and private sector companies