Is Private Healthcare Becoming Unaffordable?
“An ounce of prevention is worth a pound of cure.” (Benjamin Franklin)
Every September or October, millions of South Africans perform the same small ritual. An email announces the next year’s medical scheme contribution. It sits unopened for a while, because we know what’s in it. Eventually, we open it, look at the new premium, do a quick calculation in our heads, and ask ourselves the same question as last year. How much longer can this continue?
Something’s changed recently. Clients are no longer saying that their medical scheme is expensive. They’re beginning to wonder whether private healthcare itself is becoming unaffordable.
It’s an understandable concern. Medical scheme contributions have quietly become one of the largest household expenses for many South African families, alongside bond repayments, school fees and retirement savings. At the same time, fuel and electricity costs continue to rise, municipal bills don’t get any cheaper, grocery prices seem to edge higher every month, and salaries have generally struggled to keep pace.
When that pressure builds, it’s natural to scrutinise the biggest debit orders. The thing is, not all expenses are created equal. Some payments buy convenience. Others buy enjoyment. A few protect us from financial events that could alter the course of our lives in an instant. Healthcare belongs firmly in this last category.
The drip-drip effect
Medical schemes don’t suddenly become unaffordable because of a single annual increase. They become increasingly difficult to sustain over time, after years of increases that quietly outpace inflation and, in many cases, salary growth.
Medical inflation has always been higher than general inflation. This has meant that medical scheme contributions have always taken an increasing share of household income. The Council for Medical Schemes proposed a 3.3% increase in contributions for 2026, based on realistic utilisation assumptions. But rising claims costs, advances in medical technology, and an ageing membership led many schemes to push through much larger increases.
A family paying R8 000 a month today could realistically be paying well over R17 000 a month in 2036 if annual increases continue at around 8%. Add co-payments, benefit limits, gap cover and the increased healthcare needs that naturally accompany ageing, and it’s easy to understand why so many households are beginning to feel the strain.
For retirees, the pressure is often even higher, with healthcare costs tending to go up just as income from employment vanishes.
Don’t let frustration make the decision
One of the most valuable roles a financial planner can play is helping clients distinguish between an expense that has become uncomfortable and one that has become inappropriate.
Our financial lives evolve. Children become financially independent, mortgages are paid off, retirement arrives, and healthcare needs inevitably change. A medical scheme that suited your circumstances ten years ago may no longer be the best fit today. That doesn’t automatically mean you need less protection. It may simply mean you need a different solution.
In many cases, reviewing your hospital benefits, network providers, gap cover, and options can make things more affordable without exposing you to unnecessary financial risk. The key is to make those decisions consciously, rather than allowing another annual premium hike to make them for you.
What about the NHI?
As if rising healthcare costs weren’t enough, South Africans are also trying to make sense of the National Health Insurance (NHI) landscape.
Many practical questions remain unanswered. How quickly will it be implemented? How will it be funded? What role will private medical schemes ultimately play? Those questions are likely to remain part of the national conversation for some time.
For families sitting around the kitchen table trying to balance next month’s budget, however, those debates are irrelevant. Whatever South Africa’s healthcare system looks like in ten years, your family still needs appropriate protection today.
A quiet tipping point
Affordability matters for another reason. South Africa already has a relatively small proportion of its population belonging to medical schemes. According to the Council for Medical Schemes, around 9.13 million South Africans (roughly 15% of the population) are members.
Medical schemes require a healthy mix of young and old members. As more and more younger families are priced out of private healthcare, the pool of risk shrinks, costs are shared by fewer and affordability suffers even more.
Looking beyond the monthly debit order
Medical scheme contributions are far more than another monthly debit order. They influence retirement planning, emergency reserves, investment decisions and, ultimately, your family’s long-term financial resilience. That’s why healthcare funding should never be considered in isolation.
The objective isn’t to encourage every client to choose the most comprehensive medical scheme available, nor to suggest that every increase should be accepted without question.
Rather, it’s about making informed, intentional decisions that balance affordability with appropriate protection.
Let’s have the conversation
Many people think they have only two choices: absorb the latest increase or cancel their cover.
But this is a massive oversimplification. A different medical scheme option may provide better value. Adjustments elsewhere in your financial plan may create room to accommodate rising healthcare costs. And sometimes, after a thorough review, you’ll discover that your current cover remains the most appropriate choice.
If the rising cost of healthcare is beginning to place pressure on your household budget, speak to us before making changes to your medical scheme.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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