Rising medical aid costs and the possible end to tax credits on medical aid contributions could be the breaking point for many South Africans, AfriForum has warned, urging the government to reconsider policies that make private healthcare unattainable for many people.
At the beginning of this year medical aid schemes hiked premiums by an average of 10.7% across 12 of the country’s biggest providers, a rise far above the expected inflation rate – estimated to remain below 4%.
Effectively, reports BusinessTech, medical aid costs have jumped by 6.7% in real terms, while salary and wage increases are barely keeping pace, averaging between 1.5% and 2%.
Profmed CEO Craig Comrie highlighted several key factors driving the increases, including the growing prevalence of lifestyle-related illnesses, expensive advancements in medical technology, and a declining pool of doctors and specialists.
He said rising healthcare inflation, at its current rate, could see costs doubling every seven years.
For many South Africans, this creates an unsustainable financial burden. This situation is only made worse by the erosion of tax credits, which are meant to ease the financial strain, but which have not kept up with inflation.
Now, discussions at the National Treasury suggest that these could be scrapped altogether, which would make medical aid even less affordable.
Breaking point
In November 2024, the government discussed several tax changes for the 2025 budget, including introducing a wealth tax and removing medical aid tax credits.
AfriForum is against this plan and wants the state to increase tax credits instead of scrapping them, in line with inflation.
The organisation points out that the government has allowed medical aid tax credits to erode significantly over the past 12 years: when adjusted for inflation, their value has effectively decreased by nearly R200 per month for a family of four.
Removing them entirely would be an “extremely unwise and unjustifiable” move that would push many people out of the private healthcare system and deepen inequality in the sector, it said.
Louis Boshoff, AfriForum’s campaign officer for health, said while officials often blame private hospitals and medical aid schemes for high costs, they fail to acknowledge their own role in driving up private healthcare expenses.
Until the matter is settled, AfriForum argues that removing these credits would only create unnecessary financial hardship for households already struggling with rising costs.
BusinessTech article – Breaking point for medical aid members in South Africa (Open access)
See more from MedicalBrief archives:
State medical aid premiums now unaffordable, claims PSA
Regulator appeals for ‘reasonable’ medical aid hike
HFA opposes proposed medical scheme tax credits’ removal