Your Healthcare Financial Plan For 2025

Striking the balance between necessity and affordability

Medical schemes have announced hefty premium increases for 2025 averaging 10.69% across 12 of the biggest schemes, driven largely by increased utilisation which has surpassed pre-COVID-19 levels.   

At the same time, sharply rising living costs and heavily constrained household incomes are exerting untenable pressure, with many consumers struggling to keep pace with the soaring costs of retaining access to their private healthcare.  While many South Africans are having to re-evaluate their healthcare funding plans, the continued strain on and poor quality of many public healthcare facilities means that retaining access to private healthcare remains a necessity.  

“Reprioritising household budgets will be key. The most crucial aspect right now is to secure your healthcare cover which is fundamental to carrying you through a potential health crisis, ensuring that you get the best possible private medical care in your time of need. At the same time, the financial challenges are real, and you may have little choice but to consider downgrading on some of your chosen options. This can be a daunting and complex process as there are many interconnected variables to consider,” explains Jacqui Nel, business unit head of healthcare at Aon South Africa.

“Medical scheme benefit options tend to be complex because there are so many options and they all vary widely in terms of their offering, making like-for-like comparisons tricky at best. Factors such as a personal needs analysis, review of your claims history and affordability all come into play. While claims history is an indicator, no one is aware of some of the health risks that may occur in the future, so it is important to understand your approach to and ability to take on any risk. Based on this information, your healthcare broker can advise on the best plan to ensure that your healthcare needs are comprehensively covered and that any change won’t leave you compromised or facing hefty out of pocket expenses that you cannot afford,” says Jacqui. 

The following should be taken into consideration when considering any change to your medical scheme benefit option:

Read Article: Finding a healthcare solution that serves all South Africans

• Medical schemes have released their increases and updated plan information for 2025. These updates include changes in contributions, co-payments and benefits. Before renewing your plan, it’s crucial to evaluate the increases, most of which have been well above inflation. Check for changes in benefits such as adjustments in coverage and limits, changes to hospital networks, limits on specialist visits or increased co-payments for certain procedures. Some plans may restrict you to a network of hospitals, which could limit your access to healthcare providers. Ensure that these hospitals are conveniently located and have a good reputation. Remember that a network is not an indication of inferior care, but rather the medical scheme’s ability to negotiate for better pricing and outcomes when using these networks in the interest of their members.
• Check whether your benefit option provides the flexibility to upgrade due to life changing health events if needed - you may be healthy now, but no one knows what the future holds. If you do face a life changing health event, check whether you are able to get access to upgraded cover when required, or if you would have to wait for the year-end renewal period to exercise this option. Also, consider options that provide access to virtual doctor’s consultations as a means to provide access to more affordable, quality healthcare.
• Assess your current day-to-day expenditure and whether your existing benefits provide sufficient cover and will not leave you out of pocket. Similarly, check whether you are over-insured and paying for cover you do not need, which will allow you to buy down as an option to consider if you’re under financial pressure.
• If you or any dependants are registered for a chronic condition, check whether it qualifies under the 27 regulated chronic conditions or as an additional disease listing for cover. If you or a family member suffer from a chronic illness like diabetes, hypertension or asthma, understand that the treatment and medication are likely to be for life, so in making any changes to your medical scheme option, consider the savings versus the cost of the additional chronic medicine.
• If you are downgrading cover to a lower benefit option it is important to understand that you will receive less cover and benefits. Find out what those benefit reductions are, how your access to healthcare is affected and the implications for your pocket. If you are changing to another benefit option, move to another option within the same medical scheme to avoid any waiting periods. Most schemes will allow a buy-down at any time during the year. If you do move to another medical scheme ensure you understand the underwriting that may be imposed such as waiting periods.
• Get Gap Cover. Medical scheme benefits often don’t cover the full cost of hospitalisation or specialist procedures. Gap cover is a short-term insurance product that covers the difference between what your medical scheme pays and what the healthcare provider charges. It’s becoming increasingly essential in the South African healthcare landscape due to rising medical costs. Most medical schemes also have deductibles and co-payments and many members are left out pocket when hospitalised due to these shortfalls.  For example, if your medical scheme pays specialists at 200% of tariff, but your healthcare provider charges at 500%, you will be liable for the shortfall of 300% from your own pocket if you do not have gap cover in place.  A broker will be adept at taking you through the various gap options that are suited to your needs that best interfaces with your chosen medical scheme benefit option.    
• Benefit options that only pay for Prescribed Minimum Benefits (PMB’s) can have a big impact on your pocket as you will need to self-fund any non-PMBs, as well as your access to and expectation of care. Treatments determined as PMB brings a set of its own complex rules, which is where an accredited and experienced healthcare broker can help you navigate any potential shortfall and risk.
• If you’re downgrading to a core benefit that only covers hospitalisation, understand that you will need to fully self-fund your day-to-day primary care like GP visits, dentistry, optometry, acute/chronic medication and preventative health check-ups. Ensure that you apply the discipline to make provision for when you may need medical cover. Alternatively, consider an affordable health insurance policy that provides day-to-day healthcare options such as doctor visits and medication within a managed network of healthcare providers.
• While some employer groups still offer medical scheme benefits, as part of their employee benefits package, it is often not compulsory and employees can opt out. Think long and hard before doing so. The inherent risk in doing so is that it will be noted that the employee anti-selected medical scheme cover and if the employee chooses to join the medical scheme later, will have to be underwritten afresh, which could deviate substantially from the initial package offered in terms of underwriting and coverage. Waiting periods will also be applicable for new applicants and can range from three months up to a year.  It is pertinent to fully understand the implications of declining an employer medical scheme offering, prior to doing so. 

“Taking care of healthcare becomes even more important when finances – and your health - are under pressure.  In weighing up the essential versus non-essential aspects of your healthcare plan, your professional broker’s knowledge and impartial advice will shine a light on the way forward, and help you avoid any pitfalls in the process.  The most critical step you can take right now is to engage with a professional and accredited healthcare broker who can guide you through the process, explain the pros and cons of every potential scenario, ensuring that you can make better decisions about your healthcare financial planning for now and the foreseeable future,” Jacqui concludes.

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