Major medical aid challenges expected in South Africa in 2025

While investor confidence and foreign exchange rates are improving, South African medical aid members are set to face a major shock next year. Despite all the positive sentiment surrounding our new Government of National Unity (GNU), big increases to South African medical aid schemes are on the cards for 2025, reports Daily Investor.  

SOUTH AFRICAN MEDICAL AID IN 2025

Big price hikes from the big three providers – Discovery, Bonitas and Momentum – were announced last month (September 2024). And the concern is it’s the elderly and retired who will suffer the most from these above-inflation increases and loss of benefits. Discovery medical aid contributions – depending on the plan – will increase by between 7.4% and 10.9%.

This amounts to a weighted average of 9.4% for 2025. By comparison, The South African reported last week that the average South African salary only increased by 4.8% over the last year. Coincidentally, 4.8% is the exact figure South African Social Security Agency grants increased by in 2024, too. Based on these figures, citizens are being priced out of medical aid.

WHY SUCH HIGH CONTRIBUTIONS?

The firms explain these increases are so they can manage medical inflation across all their various schemes. The increased contributions for 2025 have been submitted to the Council for Medical Schemes (CMS) for approval. If they go ahead, increased South African medical aid contributions will be effective from Wednesday 1 January 2025.

Momentum Medical Scheme explains its increases are guided by an analysis of healthcare and economic cost trends. Nevertheless, its members will not see a double-digit increase and their benefits will not be reduced in any way. Similarly, Bonitas announced it would increase its South African medical aid offerings by an average of 10.2% from 2025. The company argues the industry has faced turbulent conditions over the last twelve months. And now that three of the big South African medical aid providers have announced increases, it’s expected that all other providers will follow suit.

CHRONIC ILLNESS AND OLD AGE

Specifically, Discovery sites an increase in chronic illness and a high ratio of older people as the reason for the rapidly increasing cost. In the last decade and a half, chronic-illness beneficiaries have increased from 15% to 33%. Sadly, unemployment in South Africa remains high, and consumers must make tough choices about their medical aid needs.

Cash-strapped consumers can only select a medical scheme they can afford. Nevertheless, providers say prioritising ‘value over cost’ is essential. Because cheaper plans often come with limited benefits and higher out-of-pocket expenses at the end of the day. So choose wisely …