Big medical aid price increases in South Africa

Momentum Health marketing officer Damian McHugh warned South African medical aid members should prepare for hefty above-inflation price increases in 2025.

McHugh shared this information during Momentum Health Solutions’ virtual Healthcare Insights Summit on Tuesday, 30 July.

He explained that the number of medical aid scheme members in South Africa has been stagnant for years.

“The industry’s size is flat. We are not seeing significant growth. However, we are seeing movement within the options inside schemes,” he said.

As medical aid prices increase, South Africans are selecting more affordable medical aid options.

The effect is that medical aid claims and costs are increasing while the industry in South Africa remains flat. It creates an unsustainable situation.

Providers must increase prices to address the changing medical aid environment. Without these increases, the schemes will fail.

McHugh said medical aid scheme members should prepare for higher-than-inflation increases to make up for the rising healthcare costs.

“Going into 2025, we will see some Covid-19 catch-up in the increases in medical aid fees,” he said.

Medical aids increased monthly contributions by between 8% and 9% in 2024, and increases are expected to be similar or higher next year.

McHugh further predicted that solvency would decline as medical aid schemes used up their reserves.

Another trend is a reduction in benefits. “The vast majority of medical aid schemes reduced their benefits in the last two years,” he said.

“We had lower price increases. However, medical aid schemes reduced many benefits previously included in packages.”

This means that consumers had to pick up more medical costs. This was done under the guise of smaller increases.

Simply put, medical aid schemes transfer the financial burden to their members by reducing day-to-day benefits.

Members also moved to efficiency discount options (EDOs), where they undertake the use of a specific network of healthcare providers.

This means they can pay less for the same benefits compared to the price of the option that allows them to visit any healthcare provider they choose.

The network of healthcare providers is more efficient and cheaper than the industry standard, and the savings are then passed on to members.