2026 medical scheme contribution increases: relief for members after a year of sharp hikes

Medical aid contribution increases for 2026 are generally lower than the sharp hikes seen in 2025, offering some relief to members after last year’s double-digit adjustments. Among the top five open medical schemes, Momentum and Fedhealth reported the highest average increases at 9.9% and 9.6%, respectively, followed by Bonitas (8.88%), Medihelp (8.46%), Discovery (7.2%), and Bestmed (6.8%). Discovery’s increase is effective from April 1, 2026, resulting in an effective annual increase of 5.4%, the lowest among the top five.

Sizwe Hosmed announced the highest average increase to date at 19.15%, effective 1 November 2025. This follows the placement of the scheme under curatorship in September 2025 after reserves fell to 5.6% in June, well below the required minimum of 25%.

What are the components of the contribution increases?

Contribution increases must allow for changes in CPI, especially the rising costs of healthcare services and products. In addition, schemes need to include a margin for ageing and utilisation, which typically ranges between 2.0% and 4.0%. Adjustments may also be required for benefit changes and to maintain adequate reserves to protect schemes against unexpected events. According to the August 2025 Consumer Price Index published by Stats SA, the healthcare cost inflation component stands at 4.7%, exceeding the overall CPI of 3.3%. Recent inflation and utilisation trends, combined with the need for enhanced margins to cushion against adverse claims experience, have led to contribution increases that surpass the CPI rate.

Each medical scheme has a unique risk pool, resulting in variations in claims experience, ageing, utilisation, and benefit design. As a result, both schemes and their individual options experience different contribution increases. At the scheme level, negotiated rates with providers such as hospitals may vary. These differences affect the overall cost of delivering benefits and, in turn, the contributions required. This complexity contributes to a diverse landscape of contribution adjustments across the market.

Medical schemes are required by legislation to apply community rating, meaning contributions may only vary based on benefit option, family size, and income. This prevents schemes from charging higher rates to older members or those with greater medical needs and results in a cross-subsidy from younger, healthier members to older members or those with higher medical needs.

However, younger and healthier individuals often see medical cover as a grudge purchase and are increasingly opting out of medical scheme membership unless it is a mandatory condition of employment. As a result, schemes tend to age over time, and the cross-subsidy from younger, healthier members to those with higher medical needs gradually declines.

Why are average contribution increases lower in 2026?

In recent years, medical schemes implemented contribution increases that were significantly above inflation. These increases also exceeded the range recommended by the Council for Medical Schemes, which is CPI plus reasonable utilisation estimates. The adjustments were necessary to recover deferred contributions from the COVID-19 period and to address deteriorating claims experience.

For 2026, however, increases are generally more moderate. This is largely due to a notable drop in CPI in 2025 compared to previous years, with CPI averaging 4.4% in 2024 and 6.0% in 2023. This provides slight relief following the steep double-digit increases seen in prior years. The higher increases from previous periods helped ensure that benefits were more accurately priced, reducing the need for further drastic adjustments.

The moderate increases are supported by cost containment measures introduced by schemes. These include stricter controls on non-healthcare expenses and improved efficiency in benefit design. While underlying cost drivers such as medical inflation, ageing membership, and chronic disease prevalence persist, schemes have worked to balance sustainability with affordability by limiting contribution growth.

Fazlin Swanepoel, head of health at Alexforbes, notes: ‘While lower increases in 2026 offer relief, schemes have continued innovating through digital health, preventive care, and smarter benefit design to ensure long-term affordability.’

To manage long-term costs, medical schemes continue to invest in preventive health initiatives and strategic partnerships, including virtual care and wellness programmes. There is also a growing emphasis on the use of artificial intelligence and data analytics to proactively predict and manage health risks. For example, Discovery has introduced personal health pathways and a sleep programme aimed at improving member outcomes.

Medshield has launched its ‘Hey Medshield’ voice assistant, similar to Siri, to educate members about their health and benefits. These digital tools support early intervention and promote healthier lifestyles, which can reduce future claims.

Preventive screening remains a key priority across the industry, with schemes encouraging members to undergo regular health assessments to detect and manage conditions early. Additional measures include the introduction of new, affordable options designed to attract younger members and ease the pressure of an ageing membership. Examples include Discovery’s Active Smart Plan and Smart Saver Series, as well as Bonitas’ BonCore. These strategies aim to reduce future claims risk and enhance member value.

Swanepoel adds: ‘As an industry, we have seen many members buying down options due to affordability pressures. To encourage growth that ensures the sustainability of medical schemes, attracting younger, healthier members through affordable, relevant options that ensure access to care has never been more important.

We have also seen a dramatic uptake in insurance products such as gap cover, as well as a surge in low-cost benefit primary care type options, not only enabling greater access to private health care for previously uncovered lives but also inadvertently relieving the burden on our state health care.

Independent advisors continue to play a crucial role in demystifying complex benefits, educating and guiding younger consumers and new private health care entrants toward cover that fits their lifestyle, their pockets, and financial goals.’

In setting contribution increases, schemes must maintain adequate reserves to ensure financial stability and protect members against adverse claims experience. This approach reinforces confidence in the industry’s commitment to providing secure and sustainable healthcare benefits.

Are these increases sustainable in the future?

Alexforbes believes that significant increases in healthcare costs are neither affordable nor sustainable over the long term. The growing need for equitable access to affordable healthcare highlights the importance of introducing Low-Cost Benefit Options (LCBOs) and alternative insurance-based solutions.

Medical schemes have moved away from the substantial short-term increases seen in previous years, opting for more moderate adjustments in 2026. This shift reflects strengthened reserves and improved sustainability of previously loss-making options, reducing the need for drastic hikes. While underlying cost pressures persist, it is anticipated that these lower increases will continue as schemes work to balance affordability with long-term financial stability.

How will contributions for medical schemes be affected by the National Health Insurance (NHI) in the future?

Under the current NHI framework, medical schemes will only be permitted to offer complementary coverage for services not included in the NHI. The scope of these complementary services will influence both the contributions charged by medical schemes and the tax rates required to fund the NHI, ultimately affecting affordability for members.

In addition, the government has begun engagements to commence the phasing out of medical aid tax credits, which currently provide financial relief to individuals contributing to private medical schemes. These credits, valued at approximately R34 billion annually, are projected to be redirected to support the NHI.

As these credits are gradually removed, the cost of maintaining private medical cover will rise, particularly for middle- and lower-income earners. This shift could lead to increased reliance on public healthcare and may require adjustments to household budgets and employer-sponsored benefits.

The NHI Act is currently being challenged by various stakeholders seeking clarity on its provisions. Numerous interest groups have launched legal challenges, arguing that the Act is unaffordable, irrational, and unconstitutional. Key concerns include limited patient choice, unclear service coverage, centralised complaints handling, and extensive state control over private healthcare.

The Constitutional Court will ultimately determine the outcome. Given the uncertainty surrounding these legal challenges, medical schemes are expected to continue operating in their current form until further clarity emerges.

On this topic, Fazlin Swanepoel, head of health at Alexforbes, comments: ‘As NHI developments unfold, collaboration between public and private sectors remains essential in promoting equitable access for all. Alexforbes is uniquely positioned to help members navigate uncertainty, offering clarity on how policy changes may impact their healthcare access and contributions.’

The industry is currently on a stable footing, supported by strong reserve levels. However, smaller schemes and those with unfavourable demographic profiles remain vulnerable to adverse claims experience. There are regulatory interventions that could enhance affordability and sustainability, including the introduction of Low-Cost Benefit Options, mandatory membership, price regulation, and the establishment of a Risk Equalisation Fund. These measures, which have not yet been implemented, hold the potential to strengthen the financial resilience of medical schemes while ensuring continued access to quality healthcare.

For the NHI to be implemented effectively, collaboration between the public and private sectors will be essential to promote equitable access for all South Africans. Whether or not you are a member of a medical scheme, if you have any questions or concerns about your medical scheme cover, please feel free to contact one of our financial advisors at hcclientservices@alexforbes.com. We are here to provide you with sound financial advice and support!

* Sibiya and Prema are from the health actuarial services at Alexforbes.

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