Actuaries say gap cover and primary plans shift scheme costs
Four Medscheme actuaries told the Actuarial Society of South Africa convention in Cape Town that cost shifting weakens efforts to contain healthcare spending. They called for co-ordination between the products and for regulatory reform.
Allan Williams, an associate consultant at Medscheme, said gap cover can raise use of services and claim costs. He said: "While gap cover provides valuable financial protection for us as individuals, it can undermine schemes’ attempts to contain costs and ensure sustainability". About 800 000 South Africans have gap cover, by one estimate. Medscheme data show 96% of gap claims come from tariff shortfalls, co-payments and sub-limits.
Elizabeth Greyling, a senior actuarial analyst at Medscheme, said contribution increases are making membership unaffordable. Contributions rose by an average of 8.1% a year from 2022 to 2026, against average inflation of 5%. About 75% of hospital admissions led to an out-of-pocket payment in 2025. She also said prescribed minimum benefits (PMBs) have not been reviewed regularly, as the law requires. PMBs made up 70% of spending on Medscheme-administered schemes in 2025, excluding medical savings account claims.
Homaam Arend, an actuarial analyst at Medscheme, said members who buy down to a primary healthcare top-up could save as much as 37% if single and 23% for a family of three. An estimated 1.5 million to two million South Africans have primary healthcare plans. Arend said younger, lower-risk members are most likely to buy down, which threatens comprehensive options. About 4% of members moved to cheaper options in 2025 for 2026, and 1.8% moved up.
Stephanie van Niekerk, a senior manager at Medscheme, said co-ordinating complementary products around medical schemes can protect schemes without waiting for law reform.
Key facts
- Who
- Stephanie van Niekerk (senior manager for actuarial product and group technical marketing at Medscheme); Elizabeth Greyling (senior actuarial analyst at Medscheme); Homaam Arend (actuarial analyst at Medscheme); Allan Williams (associate consultant at Medscheme)
- What
- Four Medscheme actuaries told the ASSA convention that costs are being shifted between medical schemes, gap cover policies and primary healthcare plans, undermining efforts to contain healthcare expenses. They cited Medscheme and partner insurer data and called for co-ordination between the products and for regulatory reform.
- When
- 25 October 2025
- Where
- Cape Town, South Africa
- Status
- Reported