The Government Employees Medical Scheme (GEMS) expects to meet the regulator’s requirement to have a 25% solvency ratio for the first time next year — 15 years after it was launched. The GEMS had 1.833-million members at the end of 2017, and provided cover to a little more than half of all eligible public servants. Its financial stability is crucial to the government’s plans for National Health Insurance (NHI), which envisages the GEMS being merged with all the other medical schemes available to public servants. The GEMS has always had a solvency ratio far below the 25% required by the Medical Schemes Act, partly due to it growing its membership base, but also because it provided generous benefits without underwriting. It did not impose waiting periods on new members, and allowed people to join and quit repeatedly as their healthcare needs ebbed and flowed, compromising its ability to build reserves. A scheme’s solvency ratio measures its claims-paying ability and is the ratio of me...

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