Govt announces PSMAS bailout to clear debt burden

Constantino Chiwenga
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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 the health minister, said government employees who make up most of PSMAS’ 900,000 customers were struggling to obtain medical services on the strength of a PSMAS health insurance policy.

He said in many instances, hospitals and pharmacies were refusing to honour the membership card, citing non-payment of claims submitted to PSMAS. This has resulted in PSMAS policy holders being required to make payments up-front, often in foreign currency.

Where PSMAS medical aid cards are accepted, significant co-payments are also required, both in respect of consultation fees and the purchase of prescription drugs, he said.

“The government has committed additional financial resources on a monthly basis to ensure the viability of PSMAS and PSMI to deliver on their core mandate. The funds are targeted to retire the debt to PSMI and other third-party service providers,” Chiwenga said, without disclosing the size of the bailout.

“That support will extend to PSMI to pay its workforce and procure adequate medical drugs consistently.”

He said PSMAS had confirmed to the government that it had accumulated significant debts with service providers.

“Concerned about the failure by employees to access health services posed by this situation, the government urged PSMAS to use a significant proportion of the money from the national treasury to retire the debt owed to the service providers in order to restore the integrity of the PSMAS medical aid card used by employees to access health services,” Chiwenga said.

“The restoration of trust will also remove the distress caused by huge shortfalls to service providers that would require civil servants to find the money for co-payments.”

Chiwenga assured government workers, who form 90 percent of contributions to PSMAS, that “the government’s support for their healthcare needs remains intact and unwavering.”

“In addition, effective measures have been and will continue to be undertaken to secure the character and viability of PSMAS which most of them depend on for healthcare services,” he said.

The government currently supports each employee who chooses to become a PSMAS member by paying 80 percent of the subscriptions translating to at least US$5 million in employer contribution monthly and US$60 million annually.