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PSEMAS should be transformed into fund

2021-11-12  Maihapa Ndjavera

PSEMAS should be transformed into fund
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During the launch of Namibia Health Financing Reform Study this week by the Economic Association of Namibia, Muine Samahiya, a consultant, said analysts have suggested transforming the Public Servants Employee Medical Aid Scheme (PSEMAS) into a national fund, covering both public and private employees.

According to Samahiya, the aim is to find a better way to finance healthcare in Namibia due to its massive burden on the State. “Given the poverty levels and size of the informal sector, the actuarially fair premium may be too high for most Namibians. 

Thus, the fund will also require subsidisation from public sources, but this should be done in consideration of the relatively small tax base in the country. However, more discussion amongst stakeholders is needed to develop the appropriate structure,” he said. 

Samahiya during his presentation said government bears the brunt of the burden of financing PSEMAS, noting the extremely high PSEMAS expenditure, which despite being a drain on State coffers is still unaffordable to most Namibians. 

Government spending on PSEMAS is less than 50% of its spending on 80% of the population.

PSEMAS, which falls under the ambit of the finance ministry, gobbles up more than 55% of treasury’s annual 2021 budget. In September 2021, the finance ministry confirmed that more than 15 000 former civil servants can no longer benefit from the government medical aid. 

During the current financial year alone, the government medical aid scheme received some N$2.6 billion of the finance ministry’s budget. -mndjavera@nepc.com.na


2021-11-12  Maihapa Ndjavera

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