GEMS responds to union backlash, defending its 9.8% contribution increase for 2026

The Government Employees Medical Scheme (GEMS) has defended its 9.8% contribution increase for 2026 as unions intensify warnings that the above-inflation hike will push public servants to breaking point.

The Public Servants Association (PSA), representing more than 245,000 public servants and pensioners, said it was shocked and angered by the announcement, calling the increase unilateral, exorbitant and completely unjustifiable.

The PSA added: “Public servants are already suffocating under the rising cost of living. This increase will devastate the finances of households that are barely surviving as it is.”

Hospersa echoed the alarm, saying the scheme had ignored the voices of workers and warning it is prepared to explore legal and industrial action.

“Our members cannot absorb a near-10% increase without seeing a single improvement in benefits,” Hospersa said.

“We reject this hike and we reject the process that led to it.”

Amid the mounting criticism, GEMS Chief Operations Officer Vuyo Gqola said the scheme had reached a point where adjustment was unavoidable.

“Annual contribution adjustments are a necessary and responsible measure to ensure financial sustainability,” he said.

“Medical inflation consistently exceeds CPI due to higher utilisation, new technologies, a growing disease burden and the impact of fraud, waste and abuse.”

Gqola said the scheme had intentionally used its reserves for several years to shield members. “We generated more than R10 billion in direct savings for members, consistently keeping contribution increases below healthcare inflation,” he said.

“With reserves now stabilising at minimum regulatory levels, the scheme must realign contributions to safeguard its ability to pay claims.”

Unions have accused GEMS of bypassing consultation with organised labour, a claim the scheme rejects.“GEMS maintains an established and transparent process for determining annual adjustments,” Gqola said.

“Engagements with PSCBC-recognised labour unions did take place, and unions were briefed on the healthcare cost drivers informing the increase.”

Hospersa disputes this, saying consultation was minimal, insufficient and treated as a box-ticking exercise.

“We were not meaningfully engaged, nor was there a serious attempt to consider alternatives that protect workers’ pockets,” the union said.

The PSA also criticised the lack of benefit increases, saying: “Members are being told to pay more for the same package. That is unacceptable when wages are stagnant and the cost of food, transport and electricity keeps rising.”

The Federation of Unions of South Africa (FEDUSA), which also represents thousands of public-sector employees, said the increase reflects a pattern of cost-shifting onto workers who have had no real wage growth for years.

FEDUSA said: “Public servants cannot continue carrying the burden of annual medical inflation while government salaries stagnate. GEMS must be held to a higher standard of affordability and accountability.”

The federation warned that continued above-inflation hikes risk forcing lower-income workers out of medical cover altogether, adding that any healthcare scheme serving government employees must ensure fair, transparent consultation and genuine engagement not ceremonial notification.

FEDUSA said it supports calls for the increase to be reviewed and for a more sustainable, worker-centred funding model.

Speaking on behalf of the Educators Union of South Africa (EUSA) Andrè De Bruyn said public servants cannot have an increase of hundreds of rands in 2026 when the subsidy does not increase and remains static.

“The cost of living is very high and despite the plight of teachers to be paid as professionals on par with corporate salaries, the daily financial burden keeps on compounding on teachers.

"Government promotes wellness programmes instead of treating teachers fairly in educational policies, systems and in financial aspects within the lives of teachers.

“The dictatorial medical aid system leaves a bitter taste in the mouth. Educators cannot choose their medical aid and government withholds subsidies when a teacher wants to move to another medical aid.

“The question remains, why? Is somebody somewhere eating the fruits of educators labour? Is the Apartheid dictatorial practice of corruption and kickbacks free? Teachers need to be treated as professionals and their perks should echo the perks of professionals in corporate. Treatment of teachers should be fair, just and supportive in a very dire economy.”

He said Eusa does not stand for increases from the pockets of teachers and zero from the side of the government.

“Things just do not balance for teachers at the moment. The monopoly Gems have needs to be broken and democratic options should prevail.”

Gqola maintained that GEMS continues to offer strong value. “For a standard public service family, contributions are up to 23% lower than comparable open schemes before the subsidy and up to 51% lower after the subsidy,” he said.

He added that the scheme continues to invest in mental health support, chronic care management and wellness programmes to meet members’ evolving needs.

Unions have called for the increase to be suspended and renegotiated.

GEMS said the adjustment has already undergone rigorous internal processes.

“The contribution adjustments were subjected to actuarial assessment, approved by the Board of Trustees and submitted to the Council for Medical Schemes,” Gqola said.

“The increase is still subject to CMS approval, and we remain open to ongoing dialogue.”

Hospersa, however, said workers cannot wait.

“If GEMS does not urgently rethink this increase, workers will be forced to consider further steps. We cannot allow public servants to be priced out of healthcare access.

The PSA added: “We will not rule out escalating this fight. Public servants deserve protection, not punishment.”

tracy-lynn.ruiters@inl.co.za

Weekend Argus