Unions rage over planned N$1bn Psemas budget cut

Government will have to convince labour unions - who are already up in arms over the plan - to accept intended cost savings it wants to implement to effect savings on the Public Service Employees Medical Aid Scheme (Psemas). Government intends to save N$1 billion of the budgetary allocations made to the medical aid scheme for the 2023/2024 and 2024/2025 fiscal years, finance minister Ipumbu Shiimi said during the tabling of the 2022 mid-term budget. The state has repeatedly sounded the alarm that the medical aid scheme was being abused by members of the medical fraternity as well as members of the fund, costing treasury as much as N$900 million per year through fraud and collusion. Addressing a consultative meeting in the run-up to the tabling of the mid-term budget, Shiimi said government had identified cost areas it could shed, but would need the buy-in of labour unions representing civil servants. “We have done the assessment. We have identified some areas where possible savings can be made, but this is not something government can decide unilaterally. Unfortunately, we need to work with the unions there.”Engagements with the relevant stakeholders were ongoing - albeit slowly, Shiimi said. “The reform is going on but it’s a bit slow because we’ll have to convince our other stakeholders that this is where we need to make some savings.”Convince usWhen approached for comment, National Union of Namibian Workers (NUNW) secretary-general Job Muniaro said government employees should not be made to suffer the consequences of planned reforms in light of the gross abuse of the scheme. “Why are you not curbing abuse? It’s an employee benefit, you can’t just change it. You need to discuss it with us,” he said. According to him, if government is aware of gross abuse, it should hold to account those who abused the medical aid scheme before attempting to cut benefits civil servants currently enjoy. “Why are people not going to jail, why are they protected? If there are doctors who were defrauding [the scheme], why are they not paying back [that money]?”Muniaro said it would be ignorant of government to push through reforms without thorough engagement. “You reform in the interests of government to punish workers who will not benefit. It is completely ignorant of those in leadership. We must be the first to be consulted. That’s a benefit that should not be tampered with.” Fund faced collapseAccording to former finance minister Calle Schlettwein, the fund almost collapsed in the absence of planned reforms.“If we do not fix the system quickly, the system will fold. Public servants will be sent to private medical aid providers,” he said.Psemas made provision for all civil servants - be it a minister or cleaner - to derive the same benefits from using the scheme, Schlettwein said, adding that its collapse would mean that government employees would pay more than what they are currently paying. “Psemas was structured so that everyone gets the same benefits, but we messed it up. We did everything in the book that was not allowed. Speaking in my personal capacity, we pay about a 10th of what you will pay for a private medical aid provider,” he said.On the other hand, former health minister Bernhard Haufiku said the fund’s structure was unfair and only benefitted a few Namibians. “We will continue to advance inequality if we continue to allocate N$3 billion in public funds to less than 300 000 Namibians, of which only 124 000 make meagre financial contributions through monthly premiums averaging N$250 per member, while the rest of the population find it hard to pay for their medical care and treatment,” he said.Gross abuses of the fund The finance ministry has been aware of gross abuses of the medical aid scheme for a long time. Namibian Sun in 2016 reported that a doctor in Rundu had issued 391 prescriptions for Pegasys, a potent drug that treats Hepatitis B and C. His total Psemas claim for this drug was N$1 292 603.48, and he was paid out N$1 185 603.02. When investigators compared the dosage to the need for the drug, it was found that he had prescribed more Pegasys than was needed on the entire African continent. Celestone, too, is a very popular medication. It is a steroid that is used for a number of diseases, including rheumatic disorders such as rheumatoid arthritis and systemic lupus erythematosus, among others. The report indicated that 66 894 prescriptions were issued for this medicine. The numbers speak for themselves when compared to the number for scripts for the rest of SADC, which in the same period totalled 64 632. In the case of Pegasys, a total of 1 205 scripts were issued in Namibia, while the rest of the SADC region saw a mere 20 issued. The costs ran into millions of dollars.

Unions rage over planned N$1bn Psemas budget cut

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Namibian Sun 2025-04-04

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Unions rage over planned N$1bn Psemas budget cut

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Namibian Sun 2025-04-04

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