After announcing a 12.75% average contribution increase for 2025 – the highest among South Africa’s top five medical schemes – Bestmed says that comparing these increases across schemes is “effectively meaningless”, given the unique financial situations each scheme faces.
Discovery Health Medical Scheme (DHMS) announced a weighted average increase of 9.3%, Momentum 9.4%, Bonitas 10.2%, and Medihelp 10.8%. Bestmed’s 12.75% increase for next year marks a 3.15% rise from its 2024 increase of 9.6%. The 2025 contribution increases are set to take effect on 1 January, pending approval by the Council for Medical Schemes (CMS).
Read: Bestmed’s 2025 contribution hike is the biggest of top five open schemes
In a statement released this week, Leo Dlamini, the chief executive and principal officer of Bestmed, said a scheme’s current year and following year financial position determines the contribution increase.
“Given that one scheme’s financial position is different from another, comparing schemes’ contribution increases is effectively meaningless. As one would expect, historical decisions regarding benefit richness, contribution increases as well as claims experience will determine the current financial position. Subsequently, different schemes will have differences in these variables and thus different increases going forward,” said Dlamini.
In the statement, he underscored the importance of balancing the costs of providing extensive coverage, while managing long-term financial sustainability.
Dlamini said Bestmed had seen an industry-wide phenomenon where schemes’ solvency ratios are decreasing, which, he claimed, for many was a direct result of contribution increases that were historically below inflation, increase in utilisation (claims) and treatment costs, particularly related to oncology and pathology.
“In recent years, the cost of healthcare has risen substantially, and medical inflation has, for a number of years, exceeded the Consumer Price Index (CPI), which is a major contributing factor in the annual medical scheme increases being higher than the CPI. Additionally, the industry has seen a proliferation of fraud, waste, and abuse,” he said.
Read: Why lower CPI won’t mean lower healthcare costs for South Africans
He emphasised that contribution increases were an outcome of what members require in terms of utilisation (claims) and what the service providers offer in terms of price for the services they provide.
“Medical schemes respond to these drivers (utilisation and price of clinical services) by adjusting the contributions in order to ensure that there is sufficient funding collected from contributions to fund these costs. If there is an over-recovery in any one year, that amount (over-recovery) remains that of the scheme and is used to fund members’ future healthcare needs,” he said.
Dlamini also highlighted an uneven legal landscape in the industry, which impacts the ability to offer affordable options for clients. He explained that Bestmed, like all medical schemes, operates under the Medical Schemes Act and is regulated by the CMS. He noted that, in contrast, financial services companies offering medical insurance at varied price points are able to do so because they are guided by a different Act and regulations.
“In an effort to reduce costs for members, the medical scheme industry has submitted proposals to register low-cost benefit options (LCBOs). However, the regulator has not finalised the rules governing these options as yet. This has, of course, impacted our ability to deliver more affordable options to our members,” said Dlamini.
On average, for the past six years, including the 2025 increase, Bestmed has had an average contribution increase of 7.8%.
Dlamini said the scheme implemented relatively low (single-digit) increases for the past six years and as such, required a higher increase for 2025. He maintained that Bestmed remains among the most affordable medical schemes.
“It is important to note that over this period, the scheme increased the overall benefit option limits while limiting the reductions of benefits,” he said.
Members will see an average benefit limit increase of 4.6% in 2025.
