What we know so far
South Africa’s Health Minister Aaron Motsoaledi has confirmed at a Section 77 hearing at the National Economic Development and Labour Council (NEDLAC) that the country’s medical aid system is unsustainable and cannot continue in its current form. The confirmation, disclosed in a joint statement by trade union federations Cosatu and Fedusa on 22 April 2026, marks an official acknowledgement of what millions of medical scheme members have experienced for years: private healthcare cover is becoming unaffordable.
Motsoaledi told the hearing that escalating medical aid costs now constitute a matter of significant social and economic concern. He agreed that the current financing model is inappropriate, a position that aligns with the stance organised labour has held for several years.
The minister’s remarks come as medical scheme contributions for 2026 have far exceeded both consumer inflation and wage growth. According to data from financial services group Alexforbes, the weighted average contribution increases across the country’s largest open medical schemes range from 6.8% to 9.9% for the current benefit year. Consumer inflation, by contrast, stood at just 3% in February 2026 according to Statistics South Africa, rising marginally to 3.1% in March.
The Government Employees Medical Scheme (GEMS), the largest restricted scheme in the country with approximately 880,000 principal members and more than 2.4 million beneficiaries, implemented a 9.5% contribution increase from February 2026. This followed a 13.4% increase in 2025, producing a cumulative rise of more than 23% in just two years.
Why it matters
The gap between medical aid contribution increases and salary growth is now so wide that it is eroding the real income of working South Africans. Public servants received a 5.5% salary increase in 2025/26 and are in line for 4% in 2026/27. Yet their medical scheme contributions have risen by more than 23% over the same period.
This disparity is not limited to the public sector. The Council for Medical Schemes (CMS) recommended that contribution increases for 2026 be limited to 3.3% plus reasonable utilisation estimates. Most major schemes significantly exceeded that guidance. Among the top open schemes, Momentum Health recorded the highest average increase at 9.9%, followed by Fedhealth at 9.6%, Bonitas at 8.88%, Medihelp at 8.46%, Discovery Health at 7.2% and Bestmed at 6.8%. Sizwe Hosmed announced the steepest rise of all at 19.15%.
Beyond rising premiums, members are also paying more out of pocket when they use their cover. Medical schemes reimburse treatment according to their own tariff structures, but specialists frequently charge between 300% and 500% of scheme rates, and in some cases as high as 700%. The difference is billed directly to the patient.
James White, Director of Sales and Marketing at Turnberry Management Risk Solutions, has stated that patients are increasingly encountering co-payments, specialist shortfalls and benefit sub-limits that leave them responsible for part of the bill. He noted that the gap between what a scheme pays and what a provider invoices can amount to tens of thousands of rands.
According to Turnberry’s claims data, co-payments exceeding R40,000 are no longer rare and are sometimes demanded upfront before a procedure can proceed. Shortfalls and co-payments together account for approximately 75% of the firm’s total claims, rising to 80% in certain provinces.
Key details and figures
The financial pressure on medical scheme members operates on multiple fronts simultaneously.
The CMS confirmed on 20 February 2026 the imposition of levies on medical schemes for the 2026/2027 financial year. The mandatory levy stands at R51.49 per principal member, effective from 1 April 2026, payable in two equal instalments by April and June. Published in the Government Gazette, the levy funds the CMS and its regulatory functions but is typically passed on to members through higher contributions or reduced benefits.
Rudolph Ackermann, CEO of Manage All Medical Scheme Brokers, stated that some schemes may choose to reduce benefits or limit access to certain services to offset the levy’s impact. The result, he warned, would be higher out-of-pocket costs for members.
Finance Minister Enoch Godongwana’s 2026 Budget included a CPI-linked increase to the medical aid tax credit. However, with contributions rising by CPI plus four to five percentage points, the relief is effectively cancelled out.
Stats SA data shows that healthcare cost inflation has consistently outpaced the headline consumer price index. In February 2026, the health component of CPI stood at 4.4%, compared with overall inflation of 3%. Yet medical scheme contributions are climbing at roughly double even the healthcare inflation figure.
Brian Harris, General Manager of Operations at Turnberry Management Risk Solutions, noted that oncology-related claims have doubled over the past seven years, driven by advances in treatment that require ongoing interventions. Some individual gap cover claimants have received between R441,575 and R678,891 in benefits over periods of less than 10 years, reflecting the scale of shortfalls that accumulate through routine medical treatment including surgery, specialist consultations and cancer care.
Medical schemes are also tightening their benefit structures. Pre-authorisation requirements for elective procedures and specialised scans have become stricter. Designated service provider networks are more restrictive, and using out-of-network providers can result in higher personal costs. Several schemes have reduced day-to-day benefits or increased co-payments for specific in-hospital procedures.
What happens next
Cosatu and Fedusa have declared that their campaign against rising medical aid costs will intensify. The unions have outlined a programme of action that includes Section 77 processes at NEDLAC, engagements within the Public Service Co-ordinating Bargaining Council (PSCBC), coordinated mass action, strategic litigation, political interventions and sustained public advocacy.
The federations are demanding the reversal of the GEMS 9.5% increase, full financial transparency from the scheme including details of administrative expenditure, outsourcing contracts and executive remuneration, and an independent forensic audit into GEMS governance and finances. They are also seeking a review of PSCBC Resolution 1 of 2006, which established GEMS, to explore whether public servants could be given greater freedom of medical scheme choice while retaining the government subsidy.
The CMS Industry Indaba, scheduled for 13 to 14 May 2026 at the Sandton Convention Centre, will bring regulators, schemes, labour and policymakers together. Retired Chief Justice Sandile Ngcobo is set to deliver a keynote address on regulation, fairness and sustainability in South Africa’s health system.
In the background, the National Health Insurance (NHI) Act remains in force. The legislation codifies the eventual removal of medical aid tax credits to fund the NHI, a move that would further increase the effective cost of private medical cover for those who choose to retain it.
Whether any of these interventions will slow the trajectory of rising costs remains uncertain. What is confirmed is that the gap between what South Africans earn and what they must pay for private healthcare is widening, and even the Health Minister has acknowledged the system cannot continue as it stands.
