Medical scheme members could face continued pressure on their pockets as healthcare costs rise, with the Board of Healthcare Funders (BHF) calling for structural reforms to make lower contribution increases possible.
The call comes after the Council for Medical Schemes (CMS) recommended that medical scheme contribution increases for the 2027 benefit year be anchored at 3.8%, plus reasonable utilisation estimates.
The BHF, a non-profit company representing members in seven African countries, supports keeping contribution increases as low as possible but says greater clarity is needed on what constitutes reasonable utilisation and the costs driving increases.
It said higher utilisation contributes significantly to rising medical scheme contributions, with increasing medical aid costs also prompting action from organised labour.
The Federation of Trade Unions of South Africa (Fedusa) has lodged a section 77 notice at Nedlac over rising medical aid costs.
BHF Managing Director Dr Katlego Mothudi said international healthcare cost trends should provide context rather than justify unchecked increases.
“Our task should be to identify which of these pressures we can influence and then implement the reforms required to bend the cost curve. Affordable medical scheme contributions require affordable healthcare. That is the bottom line.”
Locally, the CMS recommended a contribution increase guidance provided in 2025 of 3.3% for 2026. Its subsequent evaluation in Circular 21of 2026 showed an industry-wide overall weighted contribution increase assumption of 8.10%.
On average, the industry contribution increase assumption was 8.10% for 2026, against a projected CPI of 3.0%. This reflects the contribution increases CMS approved across all schemes.
For 2026, the overall industry-weighted increase assumptions for specialist and hospital costs were 8.61% and 8.51%, respectively, more than double the CMS’s 3.3% tariff benchmark. This confirms the challenge of contribution inflation is beyond just issuing contribution increase guidance; more needs to be done.
“If schemes are expected to explain why contributions need to increase, we should also be asking why hospital, specialist and other healthcare costs are rising at the rates they are. Bringing those costs down is how we create the conditions for lower contribution increases,” said Mothudi.
Healthcare benefits paid by medical schemes increased from about R218.4 billion in 2022 to R239 billion in 2023 and R259.3 billion in 2024, an increase of almost 19% over two years. Meanwhile, beneficiary growth remained modest, at 1.04% in 2023 and 0.45% in 2024.
The BHF said the figures point to increased healthcare utilisation and the need for structural reforms.
One key proposal is allowing collective tariff negotiations between medical schemes and willing healthcare providers within a regulated and transparent framework.
The BHF said healthcare providers and large hospital groups are effectively price setters, while medical schemes and their members are price takers.
Other proposed reforms include modernising Prescribed Minimum Benefits and enabling Low Cost Benefit Options to create more affordable medical scheme cover.
The BHF has called for engagement involving the CMS, National Department of Health, Competition Commission, National Treasury, healthcare funders, professionals, hospitals, organised labour, employers and consumers.
“This should not become a battle between CMS and medical schemes over a percentage,” Mothudi said.
“CMS is right to place member affordability on the agenda. BHF is saying let us now broaden that agenda and deal with the factors that determine affordability.”
According to Mothudi the sustainable answer is a stronger health system that prevents more disease, purchases healthcare better, broadens risk sharing, removes structural inefficiencies and delivers better outcomes for every healthcare rand.
