South Africans kiss medical aid goodbye

Young South Africans are increasingly putting off medical aid due to cost pressures and thinking that they don’t need it, but medical aid schemes are warning that this is pressuring medical costs in the country.

Discovery’s interim results for the six months ended 31 December 2024 showed a 34% jump in headline earnings to R4.27 billion, with profit growth of 27% year-on-year.

CEO and founder Adrian Gore expressed concern over the trajectory of medical aid inflation, evident in the group’s Discovery Health Medical Scheme (DHMS) demographics.

Gore explained that the company’s medical aid scheme and the broader industry face an age squeeze.

The DHMS, the largest private open medical aid in the country, has seen the average age of its members rise from 32.3 years in 2008 to almost 38 in 2024.

Over the same time, members suffering from chronic disease have more than doubled to almost 32% in 2024.

Gore highlighted that this was due to an increasing trend of young people dropping medical aid while they were still healthy.

He added that this increased the age profile of schemes and consequently burdened them with a disproportionate number of chronic illness claims, driving up medical aid prices above inflation.

Discovery also highlighted that annual medical inflation for the last 10 years amounted to CPI plus six percentage points.

The weighted average contribution increases for medical aids in 2025 ranged from 9.3% for DHMS to 12.8% for the priciest of six other unnamed schemes.

“The issue that’s driving up cost is twofold. One is the sustained ageing of the scheme. The second is increasing chronicity, although the two are linked,” Gore said.

Discovery explained the reasons for the drop in young people taking on medical aid. While financial constraints were a factor, it also noted ‘egalitarian’ medical aid rules as an issue.

Discovery Health CEO Ron Whelan told BusinessTech that, on average, individuals over 30 earn 57% more than those under 30.

This means that medical scheme contributions represent a significantly larger proportion of disposable income for younger people than for older people. 

“The fact that people can move in and out of the system at will means young people often stay out of the system and get in later in life,” he said.

Gore added that stricter rules must be implemented, with bigger penalties for people joining medical aid schemes later in life.

By doing this, Gore said medical schemes would be able to cover the illnesses of older members while keeping medical aid increases lower.

Bonitas, South Africa’s second biggest open medical aid scheme, found similar patterns and noted financial concerns and a younger person’s “mindset” as reasons for the decline in young members of medical aid schemes.

Bonitas’s Principal Officer, Lee Callakoppen, told BusinessTech that the average age of Bonitas beneficiaries is 35.9, similar to that recorded by Discovery.

Callakoppen said that the cost of medical aid membership is frequently cited as one of the biggest inhibitors of scheme membership.

“Schemes need to be agile in addressing these challenges to attract younger members, and we feel we are achieving this in several ways,” he said.

When youngsters enter the workplace and start earning a salary, they often don’t consider medical aid a necessity unless they have had health issues or their parents or financial advisors encourage them to do so.

Callakoppen noted another reason for the low uptake in cover by young South Africans is “the younger person’s mindset,” which is that if you’re young and healthy, you don’t need medical aid.

“However, there’s always the chance that you will have an injury or accident, develop a medical condition, or require an expensive medical procedure in the future.

“Life is unpredictable, and the reality is that younger individuals may be subject to accidents, which can lead to life-threatening complications, and having care for those scenarios is essential,” said Callakoppen.

He stressed that there needs to be more education around the fact that taking care of your health from early on is a good investment.

Callakoppen also warned young people that the cost of private healthcare can be financially crippling, especially in the case of a severe illness or surgery.

“Medical aids allow access to quality healthcare when needed, which is vital in cases of an emergency,” he said.

Discovery and Bonitas have highlighted efforts to introduce more affordable plans to address the cost barrier for young South Africans.

Whelan said Discovery Health Medical Scheme offers plans designed with the healthcare and affordability needs of younger individuals in mind.

This includes the new Active Smart plan, with contributions starting from R1,350 per member per month, which was introduced in 2025 and is already seeing increased take-up by individuals younger than 30.

He added that another option, KeyCare Regional Start, costs R1,184 per member per month and offers coverage for in- and out-of-hospital medical expenses through a regional healthcare network.

Callakoppen noted Bonitas’ new and affordable options, such as their Edge plans, which are aimed at economically active singles or couples living in the larger metros aged between 18 and 35.

These plans include the BonStart and BonStart Plus, which he noted are distinct in their scope and popular. They cover over 12,000 lives and have monthly contributions for the principal member under R1,498.