Breaking point for medical aid members in South Africa

Rising medical aid costs and the talks of the end of tax credits on medical aid contributions could be the breaking point for many South Africans.

This is the stark warning from AfriForum, which has called on the government to reconsider policies that could make private healthcare unattainable for a significant portion of the population.

At the start of 2025, medical aid schemes across South Africa introduced substantial price hikes, with premiums increasing by an average of 10.7% across 12 of the country’s largest providers.

This rise is far above the expected inflation rate, which is projected to remain below 4%.

Effectively, medical aid costs have jumped by 6.7% in real terms, while salary and wage increases are barely keeping pace, averaging between 1.5% and 2%.

There are several reasons why medical aid is getting more expensive.

Profmed CEO Craig Comrie highlighted several key factors driving the increases, including the growing prevalence of lifestyle-related illnesses, expensive advancements in medical technology, and a shrinking pool of doctors and specialists.

These elements contribute to a broader trend of rising healthcare inflation, which, at its current rate, could see costs doubling every seven years.

For many South Africans, this creates an unsustainable financial burden.

Households are being forced to either cut spending in other areas to keep their medical aid plans or downgrade their coverage, leaving them with fewer benefits.

This situation is only made worse by the erosion of tax credits meant to ease the financial strain.

Tax credits, which help make medical aid more affordable, have not kept up with inflation. Now, discussions at the National Treasury suggest that these credits could be scrapped altogether, which would make medical aid even less affordable.

The uncertainty around the fate of medical tax credits is tied to the recently signed National Health Insurance (NHI) Act, which, while now law, has yet to take effect.

The government has indicated that tax credits could be phased out to help fund the NHI. However, there is no set date for when this will happen.

Breaking point

In November 2024, the government discussed several tax changes for the 2025 budget, including introducing a wealth tax and removing medical aid tax credits.

AfriForum is against this plan and is urging the government to increase tax credits instead of scrapping them.

The organisation insists that the minister should announce an increase in medical aid tax credits in line with inflation, ensuring that the financial burden on families does not worsen.

According to AfriForum, the government has allowed medical aid tax credits to erode significantly over the past 12 years.

When adjusted for inflation, the value of these credits has effectively decreased by nearly R200 per month for a family of four.

The organisation warns that removing them entirely would be an “extremely unwise and unjustifiable” move that would push many people out of the private healthcare system and deepen inequality in the sector.

Louis Boshoff, AfriForum’s campaign officer for health, criticised the government’s approach.

He argued that while officials often blame private hospitals and medical aid schemes for high costs, they fail to acknowledge their own role in driving up private healthcare expenses.

He also questioned the government’s narrative that the NHI is the only way to expand healthcare access.

Instead, he argued that policies undermining the affordability of private medical aid are making it even harder for South Africans to secure quality healthcare.

AfriForum also pointed out that the NHI’s implementation remains uncertain, given the numerous constitutional challenges it faces.

The organisation believes that removing medical aid tax credits to help fund the NHI is premature, as the legislation itself may not withstand legal scrutiny.

Until the matter is settled, AfriForum argues that removing these credits would only create unnecessary financial hardship for households already struggling with rising costs.