If you're a member of a medical scheme in South Africa, you've probably noticed that contribution increases for 2025 are significantly higher than in previous years. Medical schemes like Bestmed, Medihelp, Bonitas, Momentum, and Discovery have announced increases ranging from 9.3% to 12.75%, and for many, this feels like a sharp escalation. What’s driving these steep price hikes, and how do they compare to previous years? Let’s explore the key reasons behind this increase.
1. Historical Trends: How Have Medical Scheme Increases Evolved?
Looking back, medical schemes have consistently increased contributions above the consumer price index (CPI). Over the past few years, medical inflation has consistently outpaced general inflation, leading to significant hikes in contribution rates across all major schemes.
2023 saw an average increase of 6.8%, just slightly higher than the CPI of 6.1%, reflecting the ongoing need to adjust for rising healthcare costs.
2024 brought even steeper increases, with most schemes raising contributions between 8% and 9%. Higher-end plans saw larger hikes, with some reaching up to 13%.
Now, in 2025, increases for major schemes are hitting as high as 12.75%, marking one of the steepest jumps in recent years.
Here’s a comparison of increases for the five largest medical schemes in South Africa:
Medical Scheme | 2024 Increase | 2025 Increase |
Discovery Health | 7.5% | 9.3% |
Bonitas | 6.9% | 10.2% |
Momentum | 9.6% | 9.4% |
Bestmed | 9.6% | 12.75% |
Medihelp | 15.96% | 10.8% |
Notable Insights
Bestmed’s 12.75% hike for 2025 is the highest among the top five schemes, significantly higher than the CMS’s recommended 6.4%-7.9% range. This steep increase reflects the scheme's need to cover rising claims and rebuild reserves after holding back increases during the pandemic.
Medihelp, which saw an exceptionally high 15.96% increase in 2024, has moderated its 2025 hike to 10.8%, indicating efforts to stabilize after a dramatic previous year.
Discovery Health and Momentum have both managed to keep their increases below 10% for 2025, reflecting a more stable pricing strategy. Momentum, in particular, continues to maintain its reputation for offering consistent, lower-than-average hikes over the past decade.
These figures highlight the complex challenges medical schemes face in balancing rising healthcare costs, post-pandemic catch-up care, and maintaining financial sustainability. The steady upward trend, particularly in 2025, shows that schemes are grappling with cost pressures far beyond general inflation, driven by an ageing membership base, increasing claims, and the need to maintain reserves.
2. Why Are Medical Schemes Increasing Prices?
A combination of factors is pushing these price hikes, and it’s not just general inflation:
Healthcare Inflation Outpaces General CPI: Healthcare inflation for 2025 is at 5.1%, higher than the overall CPI of 4.4%. This reflects rising costs in medical care, hospital fees, medications, and specialist services. Medical inflation has consistently outpaced general inflation for years, forcing schemes to raise contributions at a faster rate than CPI to keep up with rising healthcare costs.
Post-COVID Utilization Surge: During the pandemic, many elective procedures were delayed. Now, as these procedures are catching up, schemes are experiencing a surge in claims, leading to higher expenses. This “backlog” of treatments, combined with the lingering effects of COVID-19 (such as long-term respiratory and mental health conditions), is placing additional financial strain on schemes.
Ageing Membership and Chronic Conditions: South Africa’s medical schemes are dealing with an ageing population. Older members typically claim more, as they require more frequent and costly care for chronic conditions like diabetes and hypertension. Since schemes are community-rated, younger members subsidize the cost of care for older members. With fewer young members joining, schemes face a heavier claims burden from older members, driving up costs for everyone.
Rebuilding Reserves: During COVID-19, many schemes dipped into their reserves to cushion members from steep increases. This allowed schemes to offer below-inflation increases or premium freezes for 2021 and 2022. However, these reserves need to be rebuilt to meet the statutory requirement of holding 25% in reserves, adding further pressure on contributions.
3. The Role of Medical Technology and New Treatments
New medical technologies and treatments are constantly being introduced, improving care but also increasing costs. For instance, schemes are now funding more advanced treatments like drug-eluting stents and enhanced diagnostic procedures. While these advancements benefit members, they come with a hefty price tag, which is reflected in the rising contribution rates.
4. Scheme-Specific Increases: What the Major Schemes Are Saying
Here’s a closer look at the 2025 increases for the five largest medical schemes and their reasons for the price hikes:
Bestmed: With the highest increase at 12.75%, Bestmed attributes the jump to higher claims, an ageing membership, and the need to rebuild reserves after keeping increases low in previous years.
Medihelp: At 10.8%, Medihelp’s increase is driven by rising hospital admissions and the need to restore solvency ratios. The scheme had previously used reserves to offer members relief, but now requires higher contributions to maintain sustainability.
Bonitas: Bonitas announced a 10.2% increase, citing the growing prevalence of chronic conditions, as well as the introduction of new benefits like chronic care management and maternity support.
Momentum: With an increase of 9.4%, Momentum is balancing affordability with the rising cost of healthcare services and technological advancements.
Discovery: At 9.3%, Discovery’s increase is driven by a combination of rising healthcare costs, ageing membership, and the introduction of additional risk-funded day-to-day benefits.
5. What Does This Mean for the Future?
While the 2025 increases are steep, they reflect the current realities of rising healthcare costs, an ageing population, and the post-pandemic surge in claims. However, analysts, including Alexforbes, suggest that once reserves are rebuilt and schemes adjust to more stable claim patterns, contribution increases may moderate in the future.
That being said, medical inflation is likely to continue outpacing general CPI, especially as chronic conditions become more prevalent and new medical technologies push up costs. Members should brace for further above-inflation increases, even if they are slightly more manageable in the years ahead.
If you would like us to compile an analysis of your current medical scheme, review the updated benefits for 2025, or even explore other options, you can easily schedule a meeting with me here.
References
BusinessTech. Discovery announces big medical aid price hikes for 2025.
BusinessTech. Bonitas announces medical aid changes for 2024.
BusinessTech. Momentum announces big medical aid price hikes for 2025.
BusinessTech. Bestmed announces medical aid price hikes for 2025.
Moonstone. Medical scheme contribution hikes for 2025: What’s driving the surge?.
Moonstone. Medical scheme contribution hikes for 2024 exceed recommendations.
Alexforbes. SA medical industry remains robust.
FA News. Alexforbes sustainability index shows medical aid schemes are robust with healthy reserves.
Comments