Medical aid price season has started, and three schemes showed their hand this week. Momentum Medical Scheme wants an average of 7.9% more from members in 2027, Medshield has landed on the same number, and Bestmed has gone for 7.35%. The regulator had asked for 3.8%.
None of those numbers reaches a debit order until the Council for Medical Schemes approves it. In July the council published Circular 20, its guidance for the 2027 benefit year, and asked for increases anchored at 3.8%, in line with the Reserve Bank's inflation forecast for 2027. Schemes may go higher, but their trustees then have to send in a full business plan setting out the financial and actuarial case.
The 3.3% that became 8.1%
The council tried the same approach for 2026. It recommended 3.3% for that year, and by its own analysis the plans it went on to approve worked out to a weighted average of 8.1%. Consumer inflation, for comparison, averaged 3.9% over the first seven months of 2026.
The council's review of last year's pricing shows where the extra came from. Schemes assumed specialists would charge 8.61% more and hospitals 8.51% more, more than double the council's benchmark. Changes in who their members are and how much care they use added a further 4.2% on average.
The council's answer is that its number is about what members can afford, not what care costs. It judges affordability against salary inflation, and while it accepts that private medical costs usually run two to three percentage points ahead of consumer inflation, it still wants schemes' cost assumptions tied to inflation.
Price setters and price takers
The schemes' reply is that they price what they are charged. The Board of Healthcare Funders, whose member schemes cover about half of South Africa's 9 million medical aid beneficiaries, has written to the council saying it failed to account for soaring healthcare costs. Hospital groups and other providers are "effectively price setters", the board said, while schemes and their members are "price takers", and it wants schemes allowed to negotiate collectively. Its managing director, Katlego Mothudi, says that if schemes must justify their increases, someone should also be asking why hospital and specialist costs rise as fast as they do.
Younger members are the ones both sides are worried about losing. The council says high increases can act as a barrier to entry for them, and Momentum's figures show the open-scheme market, the schemes anyone can join, got 3% smaller between 2019 and 2024 while its average member got two years older, at 37. Hospital spending climbs sharply from around age 50, and when younger, lower-claiming members leave, the average cost of cover rises for everyone left behind.
Schemes are not short of a cushion on paper. The industry's solvency ratio, a measure of the reserves schemes hold, was 40.87% at the end of 2024, against a statutory minimum of 25%. Before any 2027 price is final, the council has to sign it off, and for anything above 3.8% it will be reading a business plan first.
