Government announces bailout of PSMAS to erase debt burden
HARARE – Struggling medical insurance company Premier Medical Aid Society (PSMAS) will receive a government bailout to clear its debts and improve its balance sheet, Vice President Constantino Chiwenga said on Tuesday.
Chiwenga, who is also health minister, said government employees who make up most of the 900,000 PSMAS clients were struggling to get medical services based on a PSMAS health insurance policy.
He said that in many cases, hospitals and pharmacies refuse to honor the membership card, citing non-payment of claims submitted to PSMAS. This required PSMAS policyholders to make payments in advance, often in foreign currency.
Where PSMAS medical aid cards are accepted, significant co-payments are also required, both for consultation fees and the purchase of prescription drugs, he said.
“The government has committed additional financial resources on a monthly basis to ensure the sustainability of PSMAS and PSMI to fulfill their core mandate. The funds are intended to repay debt to PSMI and other third-party service providers,” Chiwenga said, without disclosing the extent of the bailout.
“This support will extend to PSMI to pay its workforce and procure adequate medication on a consistent basis.”
He said that the PSMAS had confirmed to the government that it had accumulated significant debts with service providers.
“Concerned about the non-access of employees to health services posed by this situation, the government urged the PSMAS to use a significant part of the money from the national treasury to repay the debt owed to service providers in order to restore the integrity of the PSAMS. medical aid card used by employees to access health services,” Chiwenga said.
“Rebuilding trust will also remove the distress caused by huge shortfalls to service providers that would force officials to find the money for co-payments.”
Chiwenga assured government employees, who make up 90% of PSMAS contributions, that “government support for their health care needs remains intact and unwavering.”
“Furthermore, effective steps have been and will continue to be taken to ensure the character and sustainability of the PSMAS on which most of them depend for health services,” he said.
The government currently supports each employee who chooses to become a member of PSMAS by paying 80% of the subscriptions, which translates into at least $5 million in monthly employer contributions and $60 million annually.