Really bad news for medical aid members in South Africa
BestMed is the latest medical scheme to announce its price hikes for 2025, racking up a massive 12.75% increase to average contributions starting 1 January.
The hike is far higher than that of other schemes, which have all applied to increase prices way above the guidelines set by the Council of Medical Schemes.
BestMed said the price hikes are due to rising healthcare costs, which have risen substantially this year, and medical inflation, which has, for a number of years, exceeded the Consumer Price Index (CPI).
It added that medical schemes opted to hike fees by less than CPI in 2021 and 2022 because they had accumulated reserves during the Covid pandemic, and now that claims have returned to pre-Covid levels, “schemes must safeguard their sustainability by managing reserves and ensuring that contribution increases are at levels that commensurate with claims and expenditure”.
This has been a running theme among major medical aids in South Africa when announcing their price hikes for 2025:
- BestMed: 12.75%
- MediHelp: 10.8%
- Bonitas: 10.2%
- Momentum: 9.4%
- Discovery: 9.3%
At the beginning of August, the CMS published its recommendations and pricing guidelines for 2025, urging medical aid schemes in the country to limit their tariff hikes.
As was the case for the 2024 hikes, the CMS asked medical aid schemes to try and keep pricing as close to CPI as possible, recommending a 4.4% increase, plus “reasonable utilisation estimates”.
In previous years, the council said its historical data pointed to reasonable utilisation estimates adding around 3.5 percentage points to the hikes, while private medical inflation generally exceeds CPI by 2% to 3%.
This would put the ‘reasonable’ range anywhere between 6.4% and 7.9%.
For context, salaries in South Africa are expected to increase by around 6% – meaning salaries won’t be able to keep up with the rise in medical aid costs.
While some specific plans on medical schemes – usually the lower-cost plans – have managed to barely keep within that range, for the most part, medical aid increases far exceed the CMS’ guidelines.
The medical aids have submitted their hikes to the CMS and await its approval.
Medical aid contributions have skyrocketed over the past few years—at a rate of double inflation.
South African medical aid members were warned to again expect massive increases for 2025 and beyond as schemes scramble to contain costs.
In July, Momentum Health marketing officer Damian McHugh warned that medical fund demands are rising, and attempts to contain contribution increases are causing medical schemes to incur additional costs.
This has resulted in medical schemes having to reduce or tighten benefits to keep increases lower than necessary.
While many schemes would argue that their contributions reflect the benefits they receive, some within in the industry have noted the opposite – that plans have become tighter, benefits more restricted and more red tape thrown in.
Leo Dlamini, CEO and Principal Officer at Bestmed said that even though the 12.75% on average for all options in 2025 is higher than previous years, “we are confident that it is the right thing to do given the increased demand for healthcare services by our members as well as the increasing cost of healthcare which is largely beyond our control”.
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