Medical Aid gets pricier as 2027 hikes loom

Cape Town – South Africans with medical aid face another round of above-inflation contribution increases in 2027, with Discovery Health Medical Scheme and Momentum Medical Scheme among several major schemes announcing hikes significantly above the affordability benchmark recommended by the Council for Medical Schemes (CMS).

According to News24, Discovery will increase contributions by between 7.4% and 8.9%, with a weighted average increase of 8.2%, while Momentum has announced an average increase of 7.9% for 2027.

The increases are almost double the 3.8% benchmark recommended by the CMS. In its guidance, the regulator said contribution increases should be anchored at 3.8%, in line with the South African Reserve Bank’s inflation forecast, although schemes may make additional allowances for reasonable utilisation.

The scale of the increases has also been highlighted by IOL, which reported that Bestmed will increase contributions by a weighted average of 7.35%, Medihelp by 7.5%, and Medshield by 7.9%.

New Active Core option

“The widening gap between medical scheme annual contribution increases and consumer inflation places a significant financial burden on households,” the CMS said, according to the report.

The regulator warned that schemes seeking increases above its benchmark must provide financial and actuarial justification and said it could require a second independent actuarial opinion where pricing assumptions are not adequately supported. IOL’s report on the CMS warning

Discovery said its 2027 increase was driven by medical inflation, with its various plans facing increases ranging from 7.4% to 8.9%. The scheme said two-thirds of its members would receive an increase below 8%, while it is also introducing a new Active Core option aimed at providing a lower-cost family cover option.

Momentum, meanwhile, said its 7.9% increase reflects the rising cost of healthcare and the need to maintain benefits.

“Our 2027 offering reflects a careful balance between affordability, innovation and meaningful cover,” Momentum Health chief marketing officer Damian McHugh said, according to BusinessTech.

McHugh also pointed to hospitalisation as the largest area of medical scheme expenditure.

Largest area of expenditure 

“Hospitalisation remains the largest area of expenditure in the medical scheme market, which is why prevention and early intervention cannot be treated as optional extras,” he said.

The pressure on medical aid costs comes as healthcare expenditure continues to rise. The Board of Healthcare Funders’ concerns reported by EWN include rising private healthcare costs, with the organisation saying medical schemes paid more than R259 billion in healthcare benefits in 2024, compared with about R218 billion in 2022.

BHF managing director Katlego Mothudi said the organisation had called for “structural reforms to lower healthcare costs and make lower medical scheme contribution increases achievable”.

The CMS has also warned that persistently above-inflation increases could make medical aid increasingly unaffordable, particularly for younger people, potentially undermining the sustainability of the medical scheme market.

The latest increases therefore place renewed focus on the widening gap between general inflation, medical inflation and what consumers are paying to maintain private healthcare cover.