Money Desk
Why South African Medical Aid Contributions Are Rising in 2027
South African medical aid schemes are raising contributions by 7.35% to 8.9% for 2027, driven by higher healthcare costs and increased service utilisation.
South Africa’s major medical schemes have announced that members’ contributions will rise by between 7.35% and 8.9% in 2027.
Cost Pressures In Numbers
Council for Medical Schemes data shows that R96 of every R100 paid into a medical scheme goes towards healthcare costs, leaving R4 for other scheme expenses. The ratio means healthcare claims consume almost all contribution income before other costs are covered.
| Cost measure | Figure |
|---|---|
| Healthcare costs from every R100 contributed | R96 |
| Remaining amount from every R100 | R4 |
| Estimated healthcare consumer price inflation in 2027 | 3.8% |
| Additional pressure from utilisation | About 4% |
Health Funders Association chief executive Thoneshan Naidoo said utilisation was adding about 4% to the estimated 3.8% consumer price inflation rate for healthcare provision in 2027. Utilisation reflects the volume of healthcare services funded by schemes and adds to the underlying increase in the price of providing care.
Membership trends also create pressure on the sector. “The medical scheme market is actually shrinking and that is one of the key challenges to resolve,” said Damian McHugh, chief marketing officer at Momentum Health. A shrinking market means medical schemes have fewer members across whom healthcare costs can be distributed, alongside the inflation and utilisation pressures identified for 2027.
Chronic Care And Medicines
Chronic illness and rising medicine spending are adding to Discovery Health Medical Scheme’s costs. The share of its members registered for chronic illness treatment increased from 27.8% in 2019 to 33.6% in 2026.
| Cost measure | Change |
|---|---|
| Members registered for chronic illness treatment | 27.8% to 33.6% |
| Average annual increase in funded medicine costs | 6.2% |
| Average annual growth in spending on new high-cost drugs | 9.7% |
“Members with chronic illnesses, including mental health and lifestyle-related conditions, incur healthcare costs three times higher than those of other members,” said Deon Kotze, chief commercial officer at Discovery Health.
Medicine costs funded by Discovery Health Medical Scheme rose by an average of 6.2% a year between 2016 and 2026. “High-cost new medicines have been a major driver of this trend. Spending on these drugs grew by an average of 9.7% a year over the same period and had a disproportionate impact on medical inflation,” Kotze said.
For household budgets, Dr Katlego Mothudi, managing director of the Board of Healthcare Funders, said: “Members should compare the likely overall cost of healthcare, rather than focusing only on monthly contributions.”
Ageing Membership Raises Claims
Average beneficiary ages rose at both the Momentum medical scheme and Discovery Health Medical Scheme, indicating that their membership profiles became older over the measured periods.
| Measure | Change |
|---|---|
| Momentum medical scheme average beneficiary age, 2019-2024 | 32 to 34.2 years |
| Discovery Health Medical Scheme average beneficiary age, 2019-2026 | 35.3 to 38.4 years |
| Prescribed minimum benefit costs, 2014-2024 | Twice the rate of CPI |
| Share of total benefits paid for prescribed minimum benefits | 52% |
Momentum’s average increased by 2.2 years between 2019 and 2024, while Discovery Health Medical Scheme’s rose by 3.1 years between 2019 and 2026.
Prescribed minimum benefit costs also increased at twice the rate of CPI between 2014 and 2024. These mandatory benefits now account for 52% of all benefits paid.
