The Board of Healthcare Funders (BHF), representing medical schemes covering about half of South Africa's 9-million beneficiaries, has challenged the Council for Medical Schemes' (CMS) guidance on 2027 contribution increases. The BHF says the guidance risks creating unrealistic expectations among members. This move comes amid sustained pressure from unions campaigning against Government Employees Medical Scheme contribution increases for 2026.
In July, the CMS recommended 2027 contribution increases be anchored at 3.8%, with additional provisions for solvency requirements supported by a scheme's financial position. The guidance aims to cushion households grappling with the cost of living crisis, amplified by elevated fuel prices, and aligns with the Reserve Bank's projections for consumer price inflation. The CMS's guidance is intended to help manage expectations.
However, the BHF argues that achieving the 3.8% target requires extensive reforms to reduce healthcare costs. Schemes face cost pressures from rising healthcare utilisation, with sharp increases in hospital and healthcare professional tariffs. The BHF's MD, Katlego Mothudi, emphasises that bringing down healthcare costs is crucial for lower contribution increases.
The CMS's analysis shows that last year's recommended 3.3% contribution increase for 2026 resulted in a weighted average increase of 8.1% after approval. Annual consumer inflation averaged 3.9% in the first seven months of 2026, according to Stats SA. The BHF's challenge highlights the complexity of managing medical scheme contribution increases.
The BHF has written to the CMS, calling for implementation of the Competition Commission's Health Market Inquiry recommendations, including tariff negotiation mechanisms between funders and healthcare providers. This could improve purchasing discipline, increase transparency, and contain healthcare costs. The BHF also proposed updating prescribed minimum benefits and allowing low-cost benefit options.
The overall industry-weighted increase assumptions for specialist and hospital costs were 8.61% and 8.51%, respectively, more than double the CMS's 3.3% tariff benchmark. The BHF says this confirms that managing contribution inflation requires more than just guidance on contribution increases. The CMS was not immediately available for comment.
The dispute highlights the ongoing challenges in South Africa's healthcare sector, with unions and medical scheme associations pushing for more affordable and sustainable solutions. The BHF's proposals aim to address the root causes of rising healthcare costs and create a more equitable and sustainable medical scheme system.
Key points
- The Board of Healthcare Funders challenges the Council for Medical Schemes' 2027 contribution increase guidance, citing unrealistic expectations.
- The guidance recommends 3.8% contribution increases, but the BHF argues that achieving this target requires extensive reforms.
- The BHF proposes implementing Competition Commission recommendations and updating prescribed minimum benefits to contain healthcare costs.
