GEMS Breaks Silence After EFF Accuses Scheme of Corruption and “State Capture”

The Government Employees Medical Scheme (GEMS) has pushed back hard against allegations from the Economic Freedom Fighters (EFF), calling the party’s recent claims of mismanagement and corruption “unverified”, “disturbing”, and a breach of parliamentary protocol.

What looked like a routine parliamentary oversight issue has now spilled into a public war of words and South Africans, particularly public servants who rely on GEMS for healthcare access, are watching closely.

Why the Fight Matters

With more than 800,000 principal members most of them teachers, nurses, police officers, and frontline public servants GEMS is one of the most influential and scrutinized medical schemes in the country. Any suggestion of corruption or governance failure triggers public anxiety, especially amid national concerns about collapsing public healthcare systems.

So when the EFF released a fiery statement accusing GEMS of being “captured by private interests”, it sent ripples across social media.

EFF’s Accusations: A “Parasitic System” and Questionable Payments

In its statement, the EFF claimed GEMS had “strayed from its original transformative vision”, accusing it of prioritising private companies and insiders instead of the members it was created to serve.

The party argued that:

• Over R2.9 billion was paid in 2024 to administrative service providers Medscheme Holdings (Pty) Ltd and Metropolitan Health Corporate (Pty) Ltd.

• This reflected an increase of nearly R274 million compared to the previous year.

• It questioned whether these contracts complied with National Treasury Regulation 9, which requires 30% subcontracting to BEE-compliant entities.

• It further alleged that some board members full-time state employees unlawfully earned millions in trustee fees without permission from the Department of Health.

The EFF concluded that this was “a stark example of state capture within the healthcare sector”, citing both GEMS’ 2024 Annual Integrated Report and concerns raised by the Public Servants Association (PSA).

The accusation instantly trended online, with some public servants expressing alarm, while others questioned why political battles were playing out in the media instead of Parliament.

GEMS Hits Back: “This Should Have Gone Through Parliament First.”

GEMS responded with frustration, arguing that the EFF as a member of the parliamentary portfolio committee overseeing public service bypassed the very system designed to address such concerns.

The scheme said it was “perturbed” that allegations were released to the media before GEMS had an opportunity to respond formally through parliamentary channels.

The message was clear:
‘If you have questions, ask them in Parliament not on a press statement.’

GEMS also dismissed the corruption accusations outright, saying:

• The scheme operates under the Medical Schemes Act and follows strict internal governance rules.

• Its Board of Trustees is evenly split between ministerial appointees and GEMS members elected from within the public service.

• All trustees undergo vetting, and “no transgression of the law” has been identified.

• Administration costs are 5.59%, which GEMS says is significantly lower than the industry average.

• The scheme has had 18 consecutive years of unqualified audits a rare record in South African public entities.

Principal Officer Dr Stan Moloabi added that GEMS would investigate any credible evidence of wrongdoing but would not respond to speculation.

“Our focus remains on protecting members’ interests and maintaining public confidence in our integrity,” he said.

A Bigger Story: Politics, Healthcare, and a Distrustful Public

This dispute is tapping into something deeper: the growing mistrust between South Africans and any institution linked to state administration.

From load shedding to water outages to collapsing municipal finances, public frustration is at an all-time high. So when the EFF uses a phrase like “state capture”, the public pays attention whether the claims are substantiated or not.

On social media:

• Some users said they were unsurprised, given the broader climate of corruption allegations in the public sector.

• Others defended GEMS, pointing to its longstanding stable audits.

• A few simply asked for transparency, arguing that public servants deserve clear answers without political noise.

A Need for Calm, or a Warning Sign?

While the EFF’s claims are dramatic, the biggest issue might be how the matter was raised. Oversight disputes usually happen quietly in parliamentary committee rooms not in media statements that create public panic.

Still, the allegations tap into real concerns about medical scheme affordability, contract transparency, and the role of private administrators in public-sector healthcare.

As this story unfolds, three questions remain:

1. Will Parliament force GEMS to release more contract details?

2. Will the EFF present hard evidence to support its claims?

3. Can GEMS maintain trust among the public servants who depend on it?

For now, GEMS maintains that everything is above board and that the political drama is the real disruption.

{Source: IOL}

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