GEMS refutes EFF's allegations of mismanagement and corruption
The Government Employees Medical Scheme (GEMS) has publicly addressed allegations made by the Economic Freedom Fighters (EFF) regarding mismanagement and corporate capture.
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The Government Employees Medical Scheme (GEMS) has dismissed allegations by the Economic Freedom Fighters (EFF) that it has been captured by private interests and mismanaged, describing the claims as “unverified” and made outside of parliamentary processes.
In a statement, GEMS said it was “perturbing” that the EFF, a member of Parliament’s Portfolio Committee on Public Service and Administration, had issued a media statement accusing the scheme of corruption before allowing it to respond through formal parliamentary channels.
“GEMS finds it perturbing that the EFF, as members of the Portfolio Committee, elected to operate outside this due process, which entails GEMS responding to the questions and releasing a media statement with unverified allegations,” the Scheme said.
The statement followed the EFF’s accusations in which the party claimed GEMS had “strayed from its original, transformative goals, morphing into a parasitic system that prioritises the interests of private corporations and a limited number of insiders over its members.”
The EFF said its review of GEMS’ 2024 Annual Integrated Report and the Public Servants Association’s (PSA) recent presentation to Parliament showed what it called “a stark example of state capture within the healthcare sector.”
It alleged that more than R2.9 billion was paid in 2024 to Medscheme Holdings (Pty) Ltd and Metropolitan Health Corporate (Pty) Ltd for administrative and managed care services, an increase of nearly R274 million from the previous year.
The party also questioned whether the contracts complied with National Treasury Regulation 9, which requires that 30% of contract values be subcontracted to BEE-compliant entities and small businesses. It further alleged that certain GEMS board members, who are also full-time public servants, had unlawfully received millions in trustee fees without the required permission from their employer, the Department of Health.
GEMS denied the claims, stating that its governance and operations were compliant with the Medical Schemes Act and its own rules. It said its Board of Trustees comprised an equal number of members appointed by the Minister for the Public Service and Administration and elected by GEMS members, who are public servants themselves.
“This governance framework ensures that GEMS’ leadership is both representative of and accountable to its members,” the Scheme said, adding that all trustees are vetted and that “no transgression of the law” had been found.
Principal Officer Dr Stan Moloabi said, “GEMS takes all allegations of wrongdoing seriously and will investigate such allegations should credible evidence be presented. The Scheme’s focus remains on protecting members’ interests and maintaining public confidence in its integrity.”
The Scheme said it had consistently received unqualified audit opinions for 18 years and that its 2024 administration costs, at 5.59% of gross contribution income were “significantly less than the industry average.”
“GEMS remains fully committed to transparency and ethical governance and welcomes engagement with any oversight body to verify the integrity of its processes, contracts, and financial management,” it said.