---
title: "GEMS Expects Solvency Ratio To Fall Below 25% In 2026"
description: "GEMS says union pressure to lower medical scheme premium increases will cut monthly income by about R100m and push solvency to 23% by end-2026."
canonical_url: "https://liners.com/news/gems-solvency-ratio-below-25-percent-2026"
markdown_url: "https://liners.com/news/gems-solvency-ratio-below-25-percent-2026.md"
type: "article"
language: "en"
published_at: "2026-05-27T09:39:19.715Z"
updated_at: "2026-05-27T09:39:22.469Z"
---

# GEMS Expects Solvency Ratio To Fall Below 25% In 2026

GEMS says union pressure to lower medical scheme premium increases will cut monthly income by about R100m and push solvency to 23% by end-2026.

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- [GEMS Expects Solvency Ratio To Fall Below 25% In 2026](/news/gems-solvency-ratio-below-25-percent-2026)

## Content

## In Short
- GEMS expects its solvency ratio to drop below the 25% legal minimum by the end of 2026.
- The scheme links the decline to union pressure that pushed it to reduce planned premium increases for members.
- GEMS says the latest change could reduce contribution income by about R100 million per month.

## What Happened
South Africa’s public service medical scheme, [GEMS](/gems), says it is likely to end 2026 with a solvency ratio of about 23%, down from 24.7% at the end of 2025.

Solvency ratio is a key financial health measure for medical schemes. It compares accumulated reserves, which is the money kept for claims and shocks, to annual contribution income. Regulations set a 25% minimum.

GEMS covers about 2.4 million beneficiaries, including public servants and dependants. Its principal officer, Stan Moloabi, said the scheme reduced its weighted average contribution increase for 2026 from 9.8% to 9.5% in February. On May 7, it announced another cut, taking the increase to 7.5% from July 1.

The revised premium increase still needs approval from the Council for Medical Schemes. GEMS says the reduction will lower monthly contribution income by around R100 million.

To manage the financial hit, GEMS plans cost controls and benefit changes. These include limiting private hospital cover for members on the Tanzanite 1 option to prescribed minimum benefits, which are the minimum set of conditions schemes must cover by law. It also plans tighter managed care protocols, meaning more checks that treatment and claims are clinically appropriate.

## Why It Matters
For members, lower premium increases can help household budgets in the short term. But falling below the solvency threshold raises questions about benefit levels, claims experience, and future contribution hikes.

For South Africa’s health sector, GEMS is a large buyer of private healthcare services. Any tightening in benefits or approvals can affect provider cash flows and claim volumes.

The episode also shows how pricing decisions at major healthcare payers can be shaped by labour negotiations, not only actuarial models, especially when reserves are already close to regulatory limits.

## Sources and products

- [Sowetan](https://www.sowetan.co.za/news/2026-05-20-gems-under-pressure-from-unions)
- [GEMS](/gems)

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- [Policy & Regulation](/news)

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