South African Medical Aid Contribution Increases

South African Medical Aid Contribution Increases 2023 has continued to be a tough year for South Africa with the Rand ZAR falling 14.69% to the Pound, 13.27% to the Euro, and 7.56% to the USD year on year.  This however has the upside of lowering the costs for Multinationals entering / or operating in South Africa, relative to the GBP / Euro and USD.

Expectations for South African Medical Aid Contribution

South African medical schemes (Aid) differ in a number of ways from medical insurance found elsewhere in the world.  The chief difference is that the scheme acts as a community fund and is not necessarily underwritten like insurance policies.

Medical scheme contributions are community-rated in South Africa as it is a way to ensure that everyone has access to affordable healthcare. This means that all members of a medical scheme pay the same contribution, regardless of their age, health status, or occupation.

The scheme does however increase contributions yearly, with the effective date being the 1st day of the upcoming year. Medical schemes generally announce their expected increases in September and October each year.

Once the percentage increase is confirmed, Tennant communicates these changes to all stakeholders, members, and employers in the weeks following the announcements, allowing members to upgrade or downgrade their cover based on their medical and financial needs (members almost always have the choice of plan, with companies usually subsidizing a fixed rate of the premiums).

Discovery Health’s average annual increase for 2023 was 7.8%, which is lower than the average contribution increase rate for the 8 largest open medical schemes in South Africa. The average contribution increase rate for the 8 largest open medical schemes was 8.2%.

With medical inflation, consumer price inflation, exchange rates, and other factors we expect these increases to be between 7.5% to 9% in 2024.

Retirement Legislation – The Proposed 2-Pot System

The 2-pot system is a proposed legislative change to the current retirement fund system where members will be able to save one-third of their contributions in a “Savings Pot” that can be accessed throughout their career, while the remaining two-thirds of the contribution will be allocated to a “Retirement Pot” which will only become accessible upon retirement.

Read more about South Africa’s proposed 2-Pot System in Tennant’s Q3 Country Update, or watch this video.


If you need support with your employee benefits in South Africa, feel free to contact Asinta, and we will put you in touch with the local employee benefits experts at Tennant.