Beyond the premium: Navigating the medical aid buy-down trend without increasing client liability

South Africans are facing a healthcare crisis as medical aid cover spirals at rates well above the Consumer Price Index (CPI) inflation rate.

As consumers seek more affordable cover, brokers need to find solutions for their clients that continue to protect them against high-cost emergency and life-threatening conditions while managing day-to-day expenses.

This is the view of Adriaan Schoeman, director of medical aid comparison site MedicalAid.com, who warns that simply recommending a less expensive option to reduce a client’s premiums may not decrease their expenses overall, as a greater portion of day-to-day medical costs would need to be borne directly by the client.

Medical schemes continue to increase premiums annually at rates higher than CPI – past increases have been as high as 5-6% above the consumer inflation figure, depending on the scheme and the plan. In October last year, when schemes began announcing their increases for 2026, News24 reported that, with CPI hovering around 3.3%, schemes were upping their rates by at least double that. Bonitas raised its rates by a weighted average of 8.8%, Medshield by 7.5%, Bestmed by 6.8%, and Discovery, whose increase takes effect only on 1 April, by 7.2%.

It is no surprise that there is a trend among medical scheme members to “buy down” to less expensive options, Schoeman says. “If your premiums are rising faster than your salary increases, then they will eat more and more into your income, which will eventually be unsustainable.”

Shift to lower-tier plans
The buy-down trend is reflected in statistics from the Council for Medical Schemes in its most recent Industry Report, for the period ending 2024. The number of beneficiaries on efficiency discounted options (EDOs) doubled from 0.76 million in 2017 to 1.5 million in 2024, and the number of these options offered by schemes rose from 50 to 73.

EDOs offer members discounted premiums by operating networks of healthcare providers with which medical schemes have contracted discounted rates. Members must use providers within the network to enjoy full cover.

“Schemes are continuing to move towards maintaining networks of contracted providers to contain costs and to bypass specialists and other service providers who charge three or four times the scheme’s rate per consultation or procedure,” Schoeman says.

All things considered
Brokers must take care when dealing with clients who cannot afford to remain on their current plans, Schoeman says. “The aim is to reduce a client’s overall liability for the household’s medical expenses. If they downscale to a lower-tier plan, they must have a rough idea of how much higher their out-of-pocket expenses will be going forward. Therefore, not only will you need to assess the benefits on the new plan, and to what extent the client may utilise them, but to calculate expected day-to-day expenses not covered by the plan,” he says.

The EDOs offer a cost-effective compromise, Schoeman says. “Clients may be able to enjoy a similar range of benefits without a substantial increase in out-of-pocket expenditure. The compromise is that they are limited regarding their choice of providers, and may need to check whether network providers are convenient to access.”

On the other hand, for clients who are healthy and maintain a healthy lifestyle and whose day-to-day costs are low, a hospital plan, which typically covers only hospitalisation and the prescribed minimum benefits, may be sufficient. “It doesn’t make sense paying for cover you don’t need, and one can always switch to a higher-tier plan if circumstances demand it,” Schoeman says.

Option changes for members within a scheme are typically allowed only once a year during the scheme’s window period, so the client would need to remain on the existing option until the next window period.

Compare apples with apples
“The solution ultimately depends on the client’s individual needs and income,” Schoeman says. “You may be able to combine medical aid cover with some form of insurance, such as gap cover. Or you may look at moving a client to a different scheme, taking into account waiting periods imposed by the scheme. Only as a last resort should a client consider cancelling membership and, for instance, relying on the state. While medical aid may be expensive, it provides access to a standard of care that would be hard to find outside the private sector,” Schoeman says.

To ensure that you are comparing apples with apples, it is important to evaluate each plan’s level of cover, cost of premiums, network of healthcare providers, limits on benefits and exclusions, waiting periods for pre-existing conditions, and any additional benefits or features offered by the plan. MedicalAid.com offers such a one-stop platform.