{"id":863236,"date":"2026-06-21T14:00:00","date_gmt":"2026-06-21T12:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=863236"},"modified":"2026-06-21T14:07:38","modified_gmt":"2026-06-21T12:07:38","slug":"five-years-to-disaster-for-anyone-with-private-medical-aid-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/lifestyle\/863236\/five-years-to-disaster-for-anyone-with-private-medical-aid-in-south-africa\/","title":{"rendered":"Five years to disaster for anyone with private medical aid in South Africa"},"content":{"rendered":"\n

The growing number of young people leaving medical aid is creating a negative feedback loop that threatens the sustainability of private medical aids.\u00a0<\/p>\n\n\n\n

Medical aid funds are pushing above-inflation premium increases because they are losing healthier members. This leads more of these members to leave, exacerbating the problem.<\/p>\n\n\n\n

Luyanda Njilo, senior equity research analyst for healthcare at Nedbank Corporate and Investment Banking, warned that if the problem isn’t addressed within the next five to 10 years, medical aid schemes face collapse. <\/p>\n\n\n\n

In an interview with The Money Show<\/a>, Njilo explained that medical schemes operate on a risk-pooling system, where younger and generally healthier members help subsidise the healthcare costs of older, sicker members.<\/p>\n\n\n\n

According to Njilo, the biggest change over the past decade has been the worsening financial position of South African households.<\/p>\n\n\n\n

He noted that youth unemployment has risen sharply, limiting the number of young people who are able to join medical schemes.<\/p>\n\n\n\n

As a result, many young adults are either unable to afford medical aid or are choosing not to join. \u201cYoung people are not getting jobs and therefore are not economically active to be able to join a medical aid scheme,\u201d he said.<\/p>\n\n\n\n

\u201cHouseholds in general are facing financial pressure and, as a result, are looking for ways to cut costs, and some of them are unfortunately dropping out of the medical aid scheme.\u201d<\/p>\n\n\n\n

Njilo said many young professionals are delaying joining medical schemes because they feel healthy and believe their limited income can be better spent elsewhere.<\/p>\n\n\n\n

\u201cThe people who are supposed to be young professionals and now funding their own medical aid scheme are actually saying, \u2018Listen, with the little money that I have, I\u2019m still healthy,\u2019\u201d he said. <\/p>\n\n\n\n

\u201c\u2018I would rather not have a medical aid and then only join by the age of 34.\u2019 That\u2019s the problem we have.\u201d <\/p>\n\n\n\n

We\u2019re going to be in big trouble<\/h2>\n\n\n
\n
\"\"<\/a>
Luyanda Njilo, senior equity research analyst for healthcare at Nedbank Corporate and Investment Banking<\/em>.<\/figcaption><\/figure><\/div>\n\n\n

While medical schemes impose late-joiner penalties, Njilo said these measures have not been enough to reverse the trend because schemes still need younger members to support the risk pool.<\/p>\n\n\n\n

He pointed to the significant difference in healthcare spending between age groups. <\/p>\n\n\n\n

\u201cPeople who are aged 65 make up 10% of members, but account for 30% of the costs incurred by the medical aid schemes, whereas people aged between 20 and 44 account for 33% of members, but only spend 24% of the cost,\u201d he said.<\/p>\n\n\n\n

\u201cSo even though you\u2019re young, there will be a penalty for joining late, but the medical aid schemes will still take you on because you\u2019re basically funding the cost for the older members.\u201d<\/p>\n\n\n\n

Njilo warned that the shrinking number of younger contributors is contributing to above-inflation premium increases, creating a cycle that threatens the sector\u2019s long-term sustainability.<\/p>\n\n\n\n

\u201cThe biggest risk that I\u2019m seeing is that 52% of people who have a medical aid scheme are earning between R200,000 and R500,000 per annum,\u201d he said.<\/p>\n\n\n\n

\u201cIf your premiums are continuing to grow at 10% per year, and your salary is growing at inflation, which is around 3% to 4%, it becomes increasingly unaffordable to sustain a medical aid scheme.\u201d<\/p>\n\n\n\n

He said this creates a negative feedback loop where rising premiums force more members to leave, which in turn places even greater pressure on those who remain.<\/p>\n\n\n\n

\u201cWe\u2019re already seeing this pressure played through in the likes of GEMS, for example, where the solvency ratio has fallen below the regulatory requirement of 25%,\u201d he said.<\/p>\n\n\n\n

Njilo believes the industry faces a critical challenge over the next decade unless it can attract more young members and keep contribution increases affordable.<\/p>\n\n\n\n

\u201cThat\u2019s the big debate we\u2019re having. I\u2019d say five to 10 years. If we don\u2019t solve the problem, we\u2019re going to be in big trouble,\u201d he said. <\/p>\n","protected":false},"excerpt":{"rendered":"

Young people are leaving medical aid schemes. An expert warned that if the problem isn’t addressed within the next five to 10 years, medical aids face collapse. <\/p>\n","protected":false},"author":92,"featured_media":863237,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9876],"tags":[10068,25574,853],"class_list":["post-863236","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","tag-medical-aid","tag-nedbank-corporate-and-investment","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/863236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=863236"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/863236\/revisions"}],"predecessor-version":[{"id":864175,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/863236\/revisions\/864175"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/863237"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=863236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=863236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=863236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}