Psemas proposals: Mandatory high packages, compulsory insurance

The administrator of the state-backed medical aid fund has advised the government to remove unlimited benefits and to force all civil servants to sign up for the most expensive package.

Methealth Namibia Administrators made these recommendations as part of a raft of suggestions to reform the Public Service Medical Aid Scheme (Psemas).

Psemas caters for over 298 000 civil servants, including 5 000 pensioners and their relatives.

It has been under scrutiny over the years, including reports of about N$1 billion paid to ghost beneficiaries and the abuse of state resources by foreign medical practitioners.

The proposed plans, seen by The Namibian, were discussed at a Psemas review workshop at Okahandja two months ago, attended by the finance and health ministries, the prime minister’s office, Methealth Namibia, the Namibia National Teachers Union and the Namibia Public Workers Union.

Methealth Namibia chief executive Florian Amulungu proposed that the government removes co-payment on hospitalisation, introduces a benefit limit for private hospitalisation and reduces the markup payment on medicine from 50% to 40%. Amulungu also proposed the introduction of limits for highly utilised benefits such as medicine, radiology, pathology, medical doctors, specialists and dentistry.

Florian Amulungu

“The projected saving is N$252 million per year,” noted the minutes.

Amulungu said migrating standard members to higher options will increase utilisation.

“Expected average claims for standard option claimants is approximately N$12 800 once migrated to a higher option, and the expected expenditure will be approximately N$460 million per year.”

Amulungu’s presentation noted that unlimited benefits are a high cost driver of Psemas expenditure.

He said the current Psemas benefits were implemented in the 2013/14 financial year. The minutes show that Methealth received a circular in 2015 to review private hospitalisation limits, lifting the benefit to unlimited.

“Thereafter, follow-up consultations became unlimited as well. From 2015 onwards, Namibia observed an increase in the influx of foreign healthcare service providers, attracted by these unlimited benefits.” Amulungu said in terms of the current Psemas framework, main membership stands at around 70 000 for higher option and 40 000 for standard option members.

Amulungu told The Namibian yesterday he is not allowed to speak on the proposals.

“I was speaking (at the workshop) on behalf of my client, which is the ministry of finance. So based on that, I cannot speak to the media about it.”

Methealth Namibia has been running Psemas since 2010. The initial tender was awarded for a period of four years. But almost nine years later, no new tender was awarded, with Methealth administering Psemas on an annual extension basis.

Beth Venter


A presentation by Methealth Namibia’s chief operations officer, Beth Venter, proposed that a compulsory insurance policy, known as the gap cover, be introduced to all Psemas members.

Venter said the three proposed gap cover benefits options would cover 5%, 25% and 100% of the Psemas tariff, respectively.

“Should the gap cover proposal be considered by Psemas, implementation will be piloted for 12 months.”


Deputy director of medical aid in the finance ministry Elizabeth Kharuchas made a presentation on the proposed Psemas governance model outlining challenges and making a comparative analysis.

Kharuchas said the current framework “lacks oversight functions to ensure value for money and enforced compliance, as it lacks expertise”.

“Currently, there is only one clinical person and more specialist skills and clinical persons are needed to support the division. Outdated tariffs are also a major challenge,” noted the minutes.

“Decision-making and operational capabilities are inefficiently segregated there is a lack of accountability, which creates communication gaps, thus resulting in delayed decision making. Further, members of the scheme do not have representation in the decision-making process.”

Kharuchas compared Psemas with the government medical aid schemes in South Africa and Botswana, which operate as separate entities enacted by Acts of Parliament, while Psemas operates on a non-specific Act of Parliament, rather than as part of the Public Service Act of 1995. She said the two countries’ schemes have a 12-member board of trustees, sub-committees, executive office, and both have employer and employee representation, unlike Psemas.

“Psemas lacks a similar body in charge of its governance and is steered by a non-independent multi-ministerial and coordinating committee.” Kharuchas recommended that a temporary eight to ten member body of Psemas, consisting of employer and employee representation, be established.

Public Service Commission (PSC) chairperson Salmaan Jacobs said the PSC does not look at an applicant’s financial status when determining eligibility, but rather the criticality of the member’s condition for approval.

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