Medical Aid Holders in South Africa Face Bad News

The Council for Medical Schemes (CMS) has officially released its recommendations regarding medical aid contribution increases for 2026. In its advisory, the regulator has strongly urged medical aids to restrict their annual price hikes to align with general inflation. This guidance is aimed at protecting households from further financial strain at a time when many families are already struggling with rising living costs.

Key Takeaways

• Medical Aid Costs Consistently Outpace Inflation: Contribution increases averaged over 10% in both 2024 and 2025, compared to national inflation rates of just 3% to 4%, showing a widening affordability gap that places severe strain on households.
• Younger Members Are Being Priced Out: Rising contributions are making medical aid unaffordable for younger South Africans, creating an “age squeeze” where fewer new members join while older members with higher healthcare needs remain, threatening long-term industry sustainability.
• Structural Cost Drivers Remain Unchecked: Reliance on costly hospital-based care and specialist consultations continues to drive private medical inflation, with little shift towards primary healthcare and preventative measures that could contain spiralling costs.

Historical Trends Point to Higher Price Hikes

Although the CMS has once again advised restraint, historical evidence suggests that medical aids are unlikely to follow the recommendation. In 2025 alone, contribution increases overshot inflation by an alarming 7.1 percentage points, which highlights the ongoing trend of medical aids raising costs significantly above the rate of inflation. This has created a widening affordability gap, where even middle-income households are questioning whether the cost of belonging to a scheme is worth the shrinking benefits they receive.

CMS Recommendation for 2026 Price Hikes

For the 2026 period, the CMS has broadly recommended that medical schemes limit their increases to 3.3% above the rate of inflation, with the addition of what it refers to as “reasonable utilisation estimates.” These estimates account for the actual usage of medical services by members and the associated costs of providing cover. This recommendation is designed to curb excessive inflation-beating hikes, yet the council admits that without strong compliance, schemes are likely to push far higher increases.

Historical Reference to Reasonable Utilisation Estimates

In earlier years, the CMS has made clear that these “reasonable utilisation estimates” typically add approximately 3.5 percentage points to the recommended annual contribution increases. This has consistently pushed final increases well above the inflation-linked benchmark, which has left members facing considerably higher medical aid costs than originally indicated.

Increases Across Major Medical Aids

Among the largest medical schemes in South Africa, Discovery, the biggest player in the industry, implemented a weighted average increase of 9.3% for 2025. While this may appear comparatively moderate, it was still far above the CMS guidelines and was actually one of the lowest increases among the major schemes. MediHelp announced an average increase of 10.8%, Bonitas applied a 10.2% hike, while Momentum raised its contributions by 9.4% on average. These figures show a consistent pattern of increases exceeding regulatory recommendations.

Anticipation for September Price Announcements

September traditionally marks the month in which medical aid schemes announce their price adjustments, and 2026 will be no exception. Over the coming weeks, all major schemes are expected to publish their proposed contribution increases for the next year. Given recent trends, it is widely expected that the announced figures will once again surpass the CMS recommendations, despite repeated calls for restraint. Industry observers believe consumers should brace for yet another round of painful price hikes, particularly given ongoing cost pressures in the healthcare sector.

Requirements for Higher Increases

The CMS has stated that any medical scheme intending to raise contributions above the CPI-linked recommendations must submit a detailed business plan to the registrar. This plan should contain both financial and actuarial justifications for why the higher increase is necessary. The requirement is intended to enforce greater accountability from schemes that choose to diverge from the regulator’s guidance. Even with these requirements, regulators rarely reject proposals, meaning schemes effectively face little resistance in pushing through steep increases.

The regulator continues to emphasise that contribution increases consistently outpace inflation and that this trajectory cannot be sustained indefinitely. The ongoing misalignment between medical aid prices and the broader economy has serious implications for affordability and access to private healthcare in South Africa.

CMS Issues Warning About the Age Squeeze

The CMS has also expressed deep concern over what it described as an “age squeeze” within the industry. Annual increases in medical aid contribution rates have for many years exceeded consumer inflation, placing a heavy burden on households. When this pressure is combined with the sharp rises in electricity tariffs and persistently high food inflation, the result is that many household budgets are under severe strain. The regulator warned that without urgent reform, medical aid could shift from being a middle-class necessity to a luxury that only the wealthy can afford.

Drivers of Rising Medical Aid Costs

According to the council, its data shows that the unsustainable upward trajectory in medical aid costs is being driven largely by the industry’s heavy reliance on expensive specialist consultations and hospital-based treatments. It has argued that schemes urgently need to shift their focus towards primary healthcare services, which could help address medical problems before they escalate into costlier conditions. Improved referral pathways and a stronger emphasis on preventative care are seen as essential strategies to bring costs under control. Experts suggest that unless this structural issue is addressed, South Africa will continue to see runaway medical inflation regardless of CMS interventions.

Affordability and Cost-of-Living Pressures

Although the CMS acknowledges that private medical inflation tends to exceed CPI by a margin of 2 to 3 percentage points, it insists that annual price increase assumptions should be tied directly to inflation. The regulator stressed that with consumers already grappling with the cost-of-living crisis, raising contributions above CPI has become unaffordable for the majority of households. The financial squeeze is especially severe for lower-income members of schemes, many of whom are cutting back on other essentials in order to maintain their medical cover.

The regulator also warned that the high cost of medical aid is becoming a barrier to entry, particularly for younger South Africans. This not only reduces the ability of young people to access private healthcare but also undermines the long-term sustainability of the industry. Medical schemes rely on attracting younger and healthier members to balance the costs associated with older and sicker members.

Conclusion

The Council for Medical Schemes has once again urged restraint for 2026, yet history shows that schemes rarely adhere to its recommendations. With contribution increases persistently overshooting inflation, households are caught in a financial bind where maintaining medical cover requires sacrificing other essentials. *The risk is now twofold: younger members are being pushed out of the system, while chronic disease rates among existing members drive costs even higher.* Unless the industry urgently rebalances its approach towards affordability and preventative healthcare, South Africa faces a future where private medical aid becomes a privilege for the wealthy, leaving millions without viable healthcare options.