Psmas: Govt in debt settlement talks 

Source: Psmas: Govt in debt settlement talks – The Zimbabwe Independent March 16, 2018

Hazel Ndebele

THE Premier Service Medical Aid Society (Psmas) has engaged the Ministry of Finance to discuss possible mechanisms on how government can settle its debt with the country’s largest medical aid society by numbers, an official has said.

Speaking on the sidelines of the Psmas service centre media tour in Harare recently, Psmas managing director Tendai Kapumha said the society has received positive feedback from its employer organisations, namely government and private sector, and hopes that the engagements will assist the Psmas turnaround process.

“The new dispensation has been very positive to our issues. We have had a number of engagements with Treasury and they are working on a mechanism that might help us. Earlier on I did not dwell on the debt issue because I know it is being taken care of,” Kapumha said.

Although Kapumha declined to reveal the amounts involved, citing confidentiality, sources say government currently owes Psmas more than US$120 million and the private sector over US$10 million.

“The turnaround will only make mileage by the support the company will get from stakeholders, so we do not want to say figures as it will be offensive. But we have received tremendous support from employer organisations,” he said.

Kapumha said Psmas is now in a position to service its debts.

“An update on those who we owe is that we have been paying consistently. We are trying now to say with the resources that we get we always try to settle. We hope that in the next 12 to 18 months we would have moved on to a new stage where we would have cleared the legacy debts and focussing on new products,” Kapumha said.

“You have seen doctors scrap co-payments and shortfalls and this is as a result (of the fact) that we are being supported and we must acknowledge that.”

In April last year the government’s debt to Psmas had ballooned to over US$300 million, crippling the medical aid society’s operations. Sources revealed that although government has expressed commitment to settle its current debt, it is yet to deliver and start paying the money as discussions are still in progress.

Government’s failure to pay its debt has contributed immensely to Psmas’ problems due to non-remittance of subscriptions. This has been worsened by corruption at the organisation which has thrown the company into turmoil.

Civil servants constitute the majority of the over 800 000 members of Zimbabwe’s biggest health insurer, which has 10 branches across the country and the region. Government is supposed to pay 80% of the contribution of each employee, while the worker foots the remaining 20% which is deducted from the salary for remittance to the medical aid society.

Last year, the debt resulted in Psmas failing to run the society and adhere to the rules of medical aid funds.

The members of the society were turned away at most of the hospitals but that has since improved. Psmas has also refurbished its Harare offices.