Paresh Prema, branch head: Technical and Actuarial Consulting Solutions, Healthcare at Alexforbes

Medical scheme contributions are set to rise again in 2027, adding pressure to household budgets. The Council for Medical Schemes (CMS) recommended that increases be anchored at 3.8% with any additional provision for solvency requirements being supported by each scheme’s financial position. However, increases announced by major schemes so far are generally between 7% and 9%.

Discovery Health Medical Scheme announced increases ranging from 7.4% to 8.9%, with a weighted average of 8.2%. Bestmed announced an increase of 7.35%, Medihelp 7.5%, and Momentum and Medshield 7.9%.

For members, the scheme-wide average does not necessarily reflect what they will pay. Contribution and benefit changes can differ significantly between options in the same scheme. Some options may have no increase or a relatively modest adjustment. Others may rise by substantially more than the advertised average.

Members should therefore check the contribution for their specific option and for every adult and child dependant on their membership. They should also consider changes to benefits, medical savings allocations, provider networks and copayments before deciding whether an option still offers appropriate value.

Why medical scheme contributions are increasing

For 2027, the CMS has recommended 3.8% as the starting point for cost assumptions when schemes consider contribution increases. This guidance is not a cap. Trustees may propose a higher increase if financial and actuarial evidence supports it. Several factors influence the final increase. These include expected hospital, specialist and medicine costs, anticipated healthcare use and changes in members’ age and health profiles. Benefit changes, administration and managed care costs, and the scheme’s financial position and reserve requirements also play a role. These factors help explain why a scheme’s final contribution increase can be substantially higher than general inflation.

Each medical scheme has a different membership profile, claims experience and benefit design. Negotiated rates with healthcare providers, such as hospitals, may also vary. These differences affect the overall cost of providing benefits. They also help explain why contribution increases differ between schemes and individual options. Medical schemes use community rating. This means members cannot be charged more simply because they are older, less healthy or claim more frequently. Contributions may differ according to the benefit option, family size and, on some options, income. The system relies on cross-subsidies. Younger and healthier members help support the higher expected healthcare costs of older members and people with greater medical needs.

Affordability can put pressure on this model. Younger and healthier people may decide that medical scheme cover is unaffordable or offers insufficient immediate value, particularly when an employer does not require membership. If fewer younger members join or remain in schemes, the membership’s average age and expected claims can increase. This weakens the cross-subsidy across the risk pool.

Why 2027 increases remain above inflation

Headline consumer inflation was 4.5% in September 2026. The CMS benchmark for 2027 is based on an expected average inflation rate of 3.8% for the year. Medical scheme increases are above both figures because healthcare costs and utilisation tend to rise faster than everyday consumer prices. When salaries do not keep pace, medical scheme contributions can take up a growing share of household income.

The proposed increases for 2027 are lower than the double-digit industry-wide increase recorded in 2025. However, they still exceed the CMS benchmark and general inflation.

For members, the practical consideration is their own contribution rather than the industry average. An option’s value also depends on its benefits, provider networks, limits and copayments. Members should also consider the out-of-pocket expenses their household may face during the year.

What to check before choosing cover for 2027

Members should start by reviewing the notice from their scheme and confirming exactly what their household will pay each month.

They should also check:

• changes to hospital and specialist networks
• new copayments, benefit limits or referral requirements
• whether regular medicines and chronic conditions remain covered in the same way
• the amount of the contribution allocated to a medical savings account, where applicable
• potential out-of-pocket costs when moving to a lower-cost option
• the scheme’s deadline for changing options

Deadlines are particularly important because a scheme may require members to make their choice in November or December rather than on 1 January. Lower-cost options can help members manage rising contributions, particularly younger members and families under financial pressure. However, members should consider the monthly saving alongside any reduction or restriction in cover.

A cheaper option may have a more restricted hospital network, stricter referral requirements, higher copayments or less day-to-day cover. Before moving to a lower-cost option, members should review the healthcare services their household used during the past year. They should then consider whether they could comfortably afford expenses that may no longer be covered. The lowest monthly contribution will not necessarily provide the best value for every household. A lower contribution can become less attractive if a member later faces significant costs that another option would have covered.

Can above-inflation increases continue?

Contribution increases that consistently outpace salaries and general inflation place growing pressure on household budgets. Members may respond by moving to cheaper options, reducing their cover or leaving medical schemes altogether.

Lower-cost benefit options and other reforms could help widen access. However, consumers still need to balance affordability with the possibility of higher out-of-pocket healthcare costs.

The appropriate choice will differ from one household to another. Members need to balance the contribution they can afford with their likely healthcare needs, available benefits and provider networks. They should also consider any expenses they may have to fund themselves.

An option should provide appropriate cover at a contribution the household can maintain throughout the year. Members should assess what they will pay, what their option covers, where restrictions or copayments apply and whether the cover remains suitable for their healthcare needs and budget. Where differences between options are difficult to assess, appropriate healthcare advice can help members understand the effect of contribution and benefit changes and make an informed choice.

Ed’s note: For more on managing your medical aid options, watch EBnet’s podcast series, Health Hack SA, here.

ENDS