The medical aid that gave R800 million to South Africans

Medihelp Medical Scheme opted not to pass annual contribution increases onto its members in 2022, which effectively reinvested R800 million back into members’ pockets. However, this impacted the company’s solvency ratio.

The medical aid provider, which finds itself among some of South Africa’s largest schemes, released its results for the 2024 financial year.

These results included an update on how Medihelp’s decision in 2021 to absorb annual contribution increases rather than pass them on to members in 2022 impacted its clients.

The company described this decision as a carefully considered move to support members during a time of global uncertainty.

“It was a time of profound uncertainty – when countless individuals lost their jobs, and salaries were slashed, forcing families into financial hardship,” the company said. 

“In the face of this adversity, Medihelp chose to stand by its members, easing their burden by not increasing membership fees when they needed support the most.”

The scheme said this choice effectively reinvested R800 million back into members’ pockets. However, it affected the company’s solvency ratio.

Actuarial projections indicated that, had the scheme implemented industry-average increases, its solvency ratio, which measures a company’s ability to meet its long-term debt obligations, would have reached 35.4% in 2025.

“Medihelp continues to monitor and manage its solvency closely, and while the current level is marginally below the statutory 25% threshold, this is a temporary and actively managed deviation, supported by a focused financial recovery plan,” the company said.

“These figures place our solvency in perspective and confirm that Medihelp remains governed with prudence, foresight, and sound governance,” Medihelp principal officer Varsha Vala said.

“We are not chasing scale for its own sake. Our focus is on delivering quality cover, responsible stewardship, and a healthcare experience that gives our members true peace of mind.”

Medihelp’s latest financial results for the 2024 financial year reflect the momentum of its strategic execution.

The scheme’s relevant healthcare expenditure ratio decreased to 94%, representing a 6.8% year-on-year improvement, which eases pressure on reserves.

In addition, expenditure per average beneficiary grew by only 6%, showcasing effective cost management despite medical inflation.

“These results affirm our path forward. Medihelp continues to evolve as a trusted, future-fit healthcare partner,” Vala said.

In 2025, Medihelp plans to expand its digital offerings, introducing new preventive care benefits and forming strategic partnerships.