The Board of Healthcare Funders (BHF) has cautioned that the Council for Medical Schemes' (CMS) headline benchmark of 3.8% for contribution increases in 2027 could generate "unrealistic expectations" among medical scheme members unless government and regulators take action to reduce the underlying costs that force premiums higher.
Reform, not guidance, says industry body
In a statement to the Registrar of the CMS, the BHF said it supported the regulator's objective of limiting contribution growth, but argued that a percentage cap alone will not change the factors driving medical scheme inflation.
"Without greater clarity on what constitutes reasonable utilisation and the underlying costs driving contribution increases, the 3.8% headline figure may create unrealistic expectations among members," the BHF said.
The BHF flagged several cost drivers commonly cited in international studies, including new medical technologies, pharmaceuticals, increased utilisation, and fraud, waste and abuse. It called for targeted reforms to address those pressures rather than relying on a headline contribution figure.
International context and local tensions
Global adviser WTW's 2026 Global Medical Trends Survey projects medical costs will rise by 10.3% globally in 2026, following a projected 10% increase in 2025. For the Middle East and Africa region the survey projects an increase of 11.3%.
| Year/Region | Projected increase |
|---|---|
| Global (2025) | 10% |
| Global (2026) | 10.3% |
| Middle East & Africa (2026) | 11.3% |
Locally, the affordability of private medical cover is a growing labour issue. The Federation of Unions of South Africa (Fedusa) has lodged a Section 77 notice at the National Economic Development and Labour Council (NEDLAC) over rising medical aid costs, reflecting concern among organised labour about contributions and benefit design.
Who benefits and who pays?
The BHF said the policy task is to identify which cost pressures can realistically be influenced and to design reforms that bend the cost curve. In plain terms, the benefits accrue to members if costs can be slowed — but the price of failure falls on workers, employers and the state where greater dependence on public services may follow.
- Medical scheme members: stand to gain if reforms lower premiums or contain benefit erosion.
- Employers: face higher wage-bill pressures if employer contributions rise to maintain cover.
- Government and regulators: must consider policy levers beyond guidance, including pricing, procurement and fraud prevention.
Dr Katlego Mothudi, the BHF managing director, said international trends should be used for context and not as justification for higher local increases. He argued the sector needs clarity on reasonable utilisation and stronger measures to tackle the cost drivers under its control.
Regulatory history and the gap problem
The BHF pointed to a persistent gap between earlier CMS guidance and the contribution increases actually assumed by schemes. For 2026 the CMS advised limiting contribution and tariff assumptions to 3.3%, plus reasonable utilisation estimates. The BHF said that subsequent industry assumptions exceeded those markers, and that Circular 21 of 2026 contained the regulator's evaluation of industry practice.
That gap is central to the BHF's argument: without reforms that address utilisation, pricing and cost containment, setting a low headline benchmark risks creating expectations that cannot be met in practice.
Policy options signalled by stakeholders include:
- Clearer definitions of reasonable utilisation to limit overtreatment;
- Stronger action on medicine pricing and procurement;
- Measures to reduce fraud, waste and abuse across claims and provider billing.
None of these measures are instantaneous. They require regulatory muscle, cooperation between schemes, providers and the state, and time to show savings. In the meantime, the tension between a low contribution benchmark and persistent cost pressures is likely to sharpen debates at NEDLAC and in public policy forums as 2027 contribution season approaches.
