Big 2025 medical aid price hikes coming for South Africa – what to expect
The Council for Medical Schemes (CMS) has published a circular giving guidance on contribution increases and benefits changes for medical schemes in 2025.
The CMS publishes it guidance ever year to encourage medical aid schemes in the country to keep their tariff hikes contained.
As was the case for the 2024 hikes, the CMS has again urged medical schemes to keep tariff hikes for 2025 as close to inflation as possible – recommending a 4.4% increase, plus “reasonable utilisation estimates”.
In previous years, the council said its historical data points to reasonable utilisation estimates adding around 3.5% to the hikes, while private medical inflation generally exceeds CPI by 2% to 3%.
Thus the “reasonable” increase for 2025 should be anywhere between 6.4% and 7.9%.
“To insulate members of medical schemes against further financial hardship and the risk of losing health insurance, medical schemes are hereby advised to limit the contribution increase and cost assumptions for tariff increases for the 2025 benefit year to 4.4% plus reasonable utilisation estimates,” it said.
“The Registrar is also cognisant that some medical schemes may require contribution increases higher than the CMS’ recommended CPI-linked increments. In such instances, Trustees must provide the Registrar with a comprehensive actuarial business plan justifying the proposed contribution increases above inflation.”
The CMS’s estimates are based on consumer price inflation data from Stats SA and the South African Reserve Bank.
The year-on-year headline inflation, as measured by the Consumer Price Index (CPI), remained constant at 5.2% for April and May before decreasing slightly to 5.1% in June 2024.
Overall, inflation is expected to average 4.9% in 2024 (SARB data).
According to the Reserve Bank’s latest inflation forecast, as outlined in the July Monetary Policy statement, headline inflation is expected to average 4.4% and 4.5% in 2025 and 2026, respectively.
Despite the CMS’ recommendations, however, medical aid schemes have been mixed in their actual implementation of price hikes.
The average industry contribution increase rate of 6.8% for the 2023 benefit year was 0.7 percentage points higher than the average CPI of 6.1%.
Medical aids increased monthly contributions by between 8% and 9% in 2024, broadly in line with recommendations by the Council for Medical Schemes (CMS).
However, the increase was not flat across the board, and members of some medical aid plans—particularly on the higher, comprehensive end—saw much bigger increases.
For Discovery, the biggest medical aid scheme in the country, for example, increases ranged from 3% to 13%, with the biggest increases seen in the “premium” segment, which offers more comprehensive coverage.
Momentum announced a weighted increase of 9.6% for 2024 – the same as BestMed, which had the same average.
Bonitas had the lowest weighted average at 6.9, but even its “comprehensive” cover could not escape the premium ‘tax’, seeing a 9.6% surge in prices.
This week, Momentum warned that medical aids will likely hike prices in 2025 far beyond inflation, adding that benefits are also likely to be reduced in order to contain increases as much as possible.
Medical aid schemes usually start announcing contribution and benefit changes for 2025 in September and October.
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