Medical aid premiums rising as younger members drop out, experts warn

Medical-aid members in South Africa face growing cost pressure as younger, healthier people leave private schemes and chronic claims rise, industry figures say. The shift in scheme demographics is pushing up costs and making cover less affordable for many households.

Who is driving the change

Discovery’s data shows the average age in its Discovery Health Medical Scheme rose from 32.3 years in 2008 to almost 38. At the same time, the share of members with chronic disease more than doubled to almost 32% in 2024. Discovery CEO Adrian Gore highlighted the trend of young people dropping medical cover while they are still healthy, which raises the age profile and claims burden for schemes.

Why premiums are rising

Experts point to rising utilisation, higher hospital admissions and growing claims as direct cost drivers. Discovery has said that annual medical inflation over the past 10 years amounted to CPI plus six percentage points, a level that outpaces general inflation and squeezes affordability for many households.

Younger members leaving creates a spiral

Luyanda Njilo, senior equity research analyst for healthcare at Nedbank Corporate and Investment Banking, warned that the trend is worsening because younger people cannot afford to stay in schemes. Njilo told Hot Business:

“The issue is that the way the medical aid schemes are designed is that the younger people help subsidise the cost of the older high claim members within a medical aid scheme.”

Njilo highlighted the role of youth unemployment in this dynamic. He cited tax authority data showing around 45.8% youth unemployment in the first quarter of 2026, up from about 36% in 2015, and said:

“So young people are not joining the medical aid scheme, and the ones who are in the medical aid scheme are dropping out.”

Consequences for affordability and the system

Njilo warned that shrinking younger membership forces schemes to raise premiums to cover claims from older members. He said this has historically resulted in contributions rising above inflation and could make private medical aid increasingly unaffordable for middle-income households within the next decade if trends continue. In his view, it may take about another five to 10 years for the situation to become critical if nothing changes.

Njilo also noted the concentration of expenditure among older members: people aged over 65 make up 10% of members but account for 30% of expenditure, a mismatch that amplifies premium pressure as the risk pool ages.

What experts say is needed

While discussing long‑term fixes, Njilo argued that stronger GDP growth and more formal employment are required to rebuild the risk pool, and he suggested the healthcare model should shift towards prevention and early diagnosis to reduce expensive hospital‑based treatment.

The combination of an ageing member base, rising chronic disease prevalence and fewer young contributors is the central challenge facing private medical schemes today, according to industry sources and analysts.