Consumers are set for more financial pain next year as some medical aid schemes announced hefty increases for their member contributions.
Discovery, Momentum and Bonitas recently announced their increases for member contributions for 2025, citing medical inflation, which is above the Consumer Price Index, as being a key factor.
Discovery Health Medical Scheme said in a statement that contributions would increase by 7.4% to 10.9% across its plan range in alignment with projected medical inflation for 2025.
Dr Ron Whelan CEO of Discovery Health Medical Scheme administrator, Discovery Health, said in determining contribution increases for 2025, the priority was to maintain the benefits that members enjoy.
“To maintain the benefits available, contributions must increase to match medical inflation and expected claims for healthcare by members in 2025”.
Discovery Health said across the world, medical inflation is estimated to exceed consumer price inflation (CPI) by 6.4% in 2024. Medical inflation outpaces CPI due to ageing populations and a growing number of people being in poor health.
Damian McHugh, Chief Marketing Officer, for Momentum Health Solutions said that Momentum Medical Scheme will implement a contribution adjustment of 9.4% to ensure the continued sustainability of its offerings.
“Medical inflation has increased above CPI once again, which during the Covid-19 years was suppressed below CPI. This, coupled with the increase in the utilisation of healthcare services, has resulted in increased claims costs.
The industry is not growing, and the profile of the market is ageing ,” the scheme noted.
Lee Callakoppen, Principal Officer of Bonitas Medical Fund, said the medical scheme industry had faced turbulent conditions over the past 12 months.
“The contribution increases for 2025 vary between 8.7% and 14.9% per plan with the latter impacting only 1% of members. The increases and new benefits have been submitted to the Council for Medical Schemes and are subject to their approval. The board took into consideration market trends, including international healthcare protocols, industry analysis, benchmarking reports and benefit utilisation patterns.”
Professor Mergan Naidoo, associate professor in the discipline of Family Medicine at the University of KwaZulu-Natal said the increases were worrying.
“We definitely need to do research as to why these increases are so high. The issue we have is that medical inflation is way above CPI inflation. We have an ageing population and private healthcare while good is expensive.
“Most of the expenses from health care are coming from hospitalisation and that is why we need to address and look at the cost of hospital stay and from there address why medical contributions are expensive.”
Professor Andy Gray, senior lecturer in the division of Pharmacology at UKZN said the increases made a case for intervention.
“Medical scheme cover is already only accessed by about 14% of the population, so that is already a privileged minority.
Although more than half of all medical scheme beneficiaries are Black Africans, there is a marked difference in coverage by ethnic group.”
However, Gray said the increases did not make a case for National Health Insurance (NHI).
“For the government to just secure funds for basic services in NHI it will take years and if there were any court objections it could cause even more delays.”
Dr Cedric Sihlangu, from the South African Medical Association Trade Union (SAMATU), said it was disheartening to witness the announcement of substantial increases in membership contributions.
“These increases place a significant financial burden on consumers, making quality healthcare increasingly unaffordable. Such decisions highlight the urgent need for the implementation of a National Health Insurance (NHI) system. Through NHI, we aim to ensure equitable access to healthcare services for all citizens, regardless of their financial standing.”
Economist Dawie Roodt said the economy was not growing enough.
“On a per capita basis we are getting poorer in South Africa. It's a problem when consumers are facing high medical contributions. However I feel the NHI is not feasible as we don’t have the funds and government needs to get the funds from an economy that is not growing enough and consumers who are already overtaxed, it doesn’t make sense.”
Waldo Krugell, an economics professor at North-West University, said NHI may look more appealing to some if medical aid membership costs continued to rise.
“I think it is true that as medical aid membership becomes more and more expensive people would start to think that maybe the National Health Insurance (NHI) would be better. Unfortunately we have very little idea of what we are wishing for. There is very little information about how the NHI will be financed and even the concept is something of a vision. People will have to decide for themselves if the system will produce something that looks like current public, or current private care.”
The Mercury