Medical Aid Funding in South Africa 2025

This report on medical aid funding in South Africa includes information on the size of the industry, such as numbers of schemes, members and beneficiaries, and the state of the industry, including slow growth in membership, increasing costs and contributions, medical inflation and gap cover. There is also information on National Health Insurance (NHI), regulations, notable players and corporate actions.

The report includes profiles of 29 medical aids and administrators such as the Government Employees Medical Scheme, Discovery, Medscheme, Momentum Health, Profmed, Fedhealth, Bestmed and Bonitas.

Introduction

• South Africa’s medical aid funding industry is under growing strain due to the increasingly high costs of private healthcare, worsened by slow economic growth.
• South Africa has a two-tiered, and highly unequal, healthcare system.
• Less than 15% of South Africans were covered by medical schemes in 2023, down from 16% in 2000.
• Gross contributions by members continue to grow.
• While the National Health Insurance (NHI) Bill was signed into law in May 2024, there is uncertainty over the future of medical schemes and court challenges over the viability and sustainability of NHI.
• Medical aid scheme membership per capita has declined over recent years, while ageing scheme membership is driving up medical aid contributions.

Market Trends

• Aging scheme membership is driving up medical aid contribution.
• AI can help schemes to better service customers.
• Demand for gap cover is being driven by increasing medical costs.
• Medical schemes are using digital health platforms to lower costs and increase reach.
• Solvency ratios have declined since COVID-19 when schemes kept contributions increase low.
• The industry is experiencing consolidation.

Market Opportunities

• Attracting younger members.
• Designing affordable benefit plans.
• Medical aid schemes collectively negotiating prices for GPs and specialists.
• Online consultations and virtual care technologies (telehealth).
• Schemes partnering with startups.
• Shortcomings of public health system create an ongoing need for medical aid.
• The use of AI and automation to reduce administration costs.

Market Challenges

• Cost pressures and significant increases in medical aid contributions.
• Fraud, waste, and abuse
• Low cost benefit options haven’t been formally approved.
• Regulatory uncertainty around the NHI.
• The medical aid industry is highly concentrated.
• The termination by the US of medical funding could be a setback for local research into chronic illnesses.
• Unfavourable economic conditions such as economic uncertainty and high levels of unemployment has limited membership growth. NHI Fund eventually causing medical schemes to be obsolete and/or significant loss in membership.

Market Outlook

• Healthcare industry challenges include an ageing population, rising costs of care, affordability constraints and health policy uncertainty.
• Some proposals to address the increasing cost of healthcare have stalled.
• It is not clear whether the publication of draft regulations allowing medical aid schemes to collectively negotiate prices with doctors and specialists will reduce prices.
• The poor economic outlook is likely to continue to drive more consolidation.
• Uncertainty over the role that medical schemes will play under NHI creates a long-term challenge.
• Scheme membership looks likely to decline or stagnate in at least the near future.