How to manage steep medical scheme increases

Medical scheme membership will cost between 4.5 percent and 8.9 percent more, depending on your plan, from 1 January 2027.

The lowest average increases are for Genesis Medical Scheme (4.5 percent) and Bestmed (7.35 percent), and the highest are for Bonitas (8.7 percent), and Fedhealth (8.9 percent.) The largest open medical scheme in South Africa, Discovery Health, announced an average increase of 8.2 percent.

Why contributions are increasing so much?

One of the reasons why medical scheme contributions increase at above-inflation rates is because membership numbers are declining and members are ageing.

Open medical scheme membership decreased by three percent between 2019 and 2024, the 2026 Momentum Healthcare Insights Summit heard.

At the same time, the average age of members rose from 35 to 37, as fewer young people joined schemes. As older members cost schemes more, schemes increase contributions. 

The Council for Medical Schemes recommended schemes keep increases to 3.8 percent, but the medical schemes industry argues this isn’t viable or sustainable.

Claims are also increasing as medical technology and treatments advance and the prevalence of chronic illnesses and other conditions such as mental ill-health grows.

Your salary, on the other hand, may well only increase with inflation, putting additional strain on your household budget. Here are some ideas on how to minimise the impact:

Why benefit changes matter

Each year medical schemes try to mitigate the impact of high contribution increases with new benefits and options. You should consider these but be careful about simply considering contributions, Victor Crouser, director at Secure my Future, warns.

If your benefits increase by a lower percentage than your contributions, there can be a negative long-term impact. “The disparity between your contribution increases and benefit increases widens over time, so you end up paying more for less,” he says.

Why cheaper is not always better

Switching to a cheaper plan or option within your medical scheme may appear to be a quick fix, but it may not be the best solution.

“Before making this decision, understand what you need, what you use, and what you can afford,” advises Michael Thiart, head of corporate distribution services at Optivest.

He recommends considering the following:

Determine whether your current option suits your needs. Consider your claims in the past year to see what benefits you used and whether you ran out and had to self-fund some costs.

Consider cheaper options but pay attention to what benefits you will lose moving to that option. Will you still be covered for an ongoing condition or planned treatment? A cheaper option could save you money initially but cost you more in the long run.

Confirm whether your preferred hospitals and doctors, and in particular specialists, are covered on the new option and whether your chronic medication will be covered.

Check for any waiting periods and underwriting when moving to a new scheme.

Thiart suggests getting advice from your healthcare adviser on the overall impact on your budget.

“Don’t base your decision on the contribution increase alone,” he says. “You should pick the appropriate level of cover that you can afford, not simply the cheapest one.”

Consider medical costs not covered

Your medical costs extend beyond your membership contribution. Even if you belong to a medical scheme, you can face substantial co-payments, particularly if you are seeing a specialist. Many specialists are no longer contracted with medical schemes, Gloria Madonsela, healthcare consultant at BDO Wealth, explains.

“They may charge from 200 percent to 400 percent of medical scheme rates, leaving significant shortfalls for you to pay,” she explains.

Gap cover insurance may help to bridge this shortfall and other hospital costs that are not covered but that is an added expense in your budget, and gap cover only covers certain out-of-hospital expenses.

Using doctors, hospitals and pharmacies which are within your medical scheme option's network can avoid unnecessary co-payments, according to Deon Kotze, chief commercial officer at Discovery Health.

Using the same general practitioner (GP) for primary healthcare can also help to lower your medical costs. “Our research shows if you consistently consult a GP who understands your medical history, there are better outcomes, lower healthcare costs, fewer x-ray and lab tests, and fewer hospital admissions,” he says.

Before treatment, check with your scheme about your available cover and get input on how to minimise out-of-pocket costs.

Getting the most out of your medical scheme

You can save money by using the cost-saving benefits provided by your scheme. If you have a chronic condition, such as high blood pressure or diabetes, register for the chronic medicine benefit or disease programme for illnesses such as cancer, diabetes, HIV or heart conditions.

Make use of your scheme’s screening and preventative care benefits because it costs more to treat health issues which become more complex over time. Preventative care can identify risks early on and help you make decisions around your healthcare options, Damian McHugh, chief marketing officer at Momentum Health, says.

Some schemes pay for out-of-hospital benefits if you complete certain wellness tests for body mass index (BMI), glucose or HIV with no effect on your medical savings account.

Ask your doctor or pharmacist if there is a generic alternative for your medicines or if the medication is available on the list of medicines or formulary approved by the medical scheme for specific conditions covered without a co-payment, Kotze adds.

Crouser suggests paying for over-the-counter medicines from your pocket, reserving your medical savings account for big-ticket items. “Any unused amounts are carried forward into the following year,” he says.

If you are not paying for your medical scheme contributions through an employer, don’t forget to include your medical scheme fees tax credits when doing your tax return, as this reduces your tax bill.

“If you are over 65, include all your medical expenses not paid by your scheme when submitting your tax return,” Crouser adds.

Same issue next year

Medical scheme contributions increase at rates above inflation every year, so this is a recurring issue. Before making any decisions, consult a specialist healthcare adviser who will consider your personal circumstances and needs and advise you.

The adviser’s fee is paid for from your scheme contributions, so it won’t cost you anything.