Medical schemes want to make cover more affordable. But one of the industry’s biggest proposed changes – cutting back prescribed minimum benefits (PMBs) – raises an uncomfortable question: would members pay less for medical scheme cover, or simply pay more when they get sick?
The Board of Healthcare Funders (BHF), which represents about 40 medical schemes and medical scheme administrators, argues that the PMB framework is outdated, too hospital-centric, and a major driver of costs. It wants the statutory package reformed to make room for more affordable cover options.
But the Council for Medical Schemes (CMS) is not biting. In a newly released discussion paper titled “Prescribed Minimum Benefit Reform in South Africa: Solidarity, Equity and the Limits of Product Affordability – A Regulatory Perspective”, the CMS challenges the case for cutting PMBs to make medical schemes more affordable.
The regulator says there is insufficient evidence that PMBs are the cause of unaffordability, or that reducing the compulsory package would lower costs without shifting more of the burden to members, households, and the public health system. A smaller benefits package does not automatically mean a lower overall healthcare bill, it argues.
With another round of steep contribution increases on the way, the stakes are getting higher. Bonitas has announced a weighted average contribution increase of 8.7% for 2027, followed by Discovery Health Medical Scheme at 8.2%, Momentum Medical Scheme at 7.9%, Medihelp at 7.5%, and Bestmed at 7.35%.
With membership growing only slowly and the average age of beneficiaries rising, the affordability problem is real. The dispute is over what is driving it, and whether weakening the minimum protection members are entitled to is the answer.
The industry’s case for change
PMBs are the minimum benefits that all medical schemes must cover under the Medical Schemes Act. They include emergency medical conditions, specified diseases, and 26 chronic conditions. The framework is intended to protect members from catastrophic healthcare costs and ensure that essential treatment is covered.
Regulation 8 is where the difficulty lies for schemes wanting to offer cheaper options with fewer compulsory benefits. It requires every benefit option to cover the diagnosis, treatment, and care costs of PMB conditions in full, subject to the regulation’s provisions. In other words, members are entitled to the same statutory minimum protection whether they belong to a comprehensive plan or a more affordable option.
Schemes can still offer different levels of cover through provider networks and rules about where members can receive treatment. But they cannot simply remove compulsory benefits to bring down the price of an option. Offering a lower-cost product with a narrower set of statutory benefits would require changes to the existing regulatory framework.
The PMB package has remained largely unchanged since 2003, despite changes in healthcare needs, treatment practices and costs.
In a July commentary published by Spotlight, BHF managing director Katlego Mothudi argued that the PMB framework is too heavily weighted towards hospital treatment, at the expense of primary healthcare, prevention, essential medicines, and diagnostics.
The BHF estimates that PMBs account for about 60% of medical schemes’ budgets, compared with approximately 40% when the package was amended in 2003. Mothudi has argued that a revised core package could help schemes to offer lower-cost options to people who cannot afford conventional medical scheme cover.
He put the cost of basic cover at about R1 600 a month for an individual and R4 000 for a family of three. The BHF’s concern is that contributions are beyond the reach of many households, leaving millions of people who use private healthcare without medical scheme membership.
The organisation wants a redesigned core service package with more emphasis on primary healthcare and prevention. It has also proposed lower-cost benefit options that could cover a subset of revised PMBs, potentially using services available through public-sector clinics.
The BHF argues that a package better aligned with current healthcare needs could make cover more affordable, while earlier intervention could help to avoid some of the costs associated with advanced illness.
Its concerns extend to the prices schemes pay providers. The BHF wants medical schemes to be allowed to negotiate tariffs collectively with willing healthcare providers, under regulatory oversight and with transparent pricing.
Moneyweb reported earlier this month that the BHF had written to the CMS calling for structural reforms to reduce healthcare costs. Mothudi told the publication that the BHF had received a response and was awaiting a meeting with the regulator.
The CMS questions the evidence
The CMS paper challenges the industry’s claim that PMBs account for about 60% of scheme expenditure.
The authors say they cannot reproduce that figure from published CMS reports. The underlying methodology and data, including how PMB expenditure is defined, have not been made public, they say.
The CMS’s 2025/26 annual report shows that PMB expenditure rose from R124.36 billion in 2023 to R135.66bn in 2024. Expenditure per beneficiary per month increased by 8.49%, from R1 145.07 to R1 242.27. PMBs accounted for 52.31% of total benefits paid in 2024.
The 52.31% figure does not necessarily contradict the BHF’s estimate. The CMS measures PMB expenditure as a share of total benefits paid, while the BHF’s figure is described as a share of scheme budgets or expenditure. The two measures may not be directly comparable.
The CMS’s objection is that an expenditure share, on its own, does not show that statutory benefits are causing medical schemes to become unaffordable.
The annual report records other cost pressures. In 2024, the cost per hospital admission rose by 9.88%, although admission rates declined slightly. Hospitals accounted for 35.95% of benefits paid, specialists for 28.02%, and medicines dispensed for 14.05%.
The CMS argues that affordability cannot be tackled by looking at PMB expenditure in isolation. Provider prices, treatment intensity, utilisation, and an ageing membership all affect costs. Its paper points to measures such as better regulation of provider tariffs, more strategic purchasing of healthcare services, and broader risk pooling.
Any proposal to reduce PMBs should demonstrate the expected savings, identify which services would be excluded, and explain who would pay for treatment no longer covered.
Can prevention bring costs down?
Both the BHF and the CMS want a stronger focus on prevention and primary healthcare. Where they differ is whether that shift can reduce costs, and whether it should come at the expense of existing benefits.
The BHF argues that a stronger focus on prevention, screening, and early treatment could help people avoid more expensive care later.
The CMS also wants primary healthcare to feature more prominently in the PMB framework. Its paper notes that the need to move beyond the package’s hospital-centric design has been recognised for years.
The regulator has developed a proposed primary healthcare package covering services such as screening and vaccination, mental healthcare, basic dental services, and rehabilitation.
The difference is over how those services should be funded. The CMS questions whether greater emphasis on prevention should come at the expense of treatment for people who already have serious illnesses. It also cautions that prevention does not always reduce total expenditure; the effect depends on the intervention, the condition, and the population receiving it.
The regulator wants the revised package to be based on evidence about clinical effectiveness, cost-effectiveness, budget impact, and equity. The question is whether primary healthcare should be added to a common minimum package or funded by reducing some existing entitlements.
Provider prices are part of the debate
The BHF argues that individual negotiations leave schemes with limited bargaining power, particularly when dealing with large hospital groups. Before 2003, healthcare funders and providers negotiated tariffs centrally. That arrangement ended following competition-law intervention.
In February 2025, the Minister of Trade, Industry and Competition published draft rules proposing a three-year exemption that would allow medical schemes and healthcare providers to negotiate tariffs collectively. Moneyweb reported that the proposed exemption had not been finalised. The PMB review also remains outstanding.
The CMS supports a regulated approach to tariff negotiations. Its paper points to rising provider costs as one of the pressures on scheme expenditure, while cautioning that negotiated price reductions would need to be monitored to establish whether savings are passed on to members.
The Competition Commission’s 2019 Health Market Inquiry recommended a more transparent approach to tariff determination, including a multilateral negotiation forum.
A review still waiting for an outcome
The CMS can develop proposals for PMB reform, but it cannot change the statutory benefits on its own. Under section 67(1)(g) of the Medical Schemes Act, the power to make regulations prescribing minimum benefits rests with the Minister of Health, after consulting the CMS. Any changes must go through the applicable regulatory process.
That process has been under way for a decade. The CMS initiated the PMB review in 2016, sought stakeholder input in 2018, and consulted on a proposed primary healthcare package in 2019. The Minister of Health declined to endorse an earlier proposal because it did not include primary healthcare services.
The CMS’s 2025/26 annual report records progress in refining the proposed package into a core set of nurse- and doctor-led services. A costed draft has been developed, but further work is needed before revised benefits can be implemented.
Last month, the CMS requested membership and claims data from medical schemes and administrators for 2023 to 2025. The information will help the PMB Review Costing Committee to assess the proposed package’s cost and affordability and inform implementation planning. Submissions were due by 15 October.
The CMS’s strategic plan for 2025 to 2030 offers no completion date. Instead, it describes the review as an ongoing process, with benefits evolving alongside the National Department of Health’s work on National Health Insurance (NHI) benefits. Future updates are intended to draw on health technology assessments and evidence-based principles.
The plan also acknowledges that the current requirement to review PMBs every two years has not been consistently met. The CMS intends to ask the Minister to consider amending the regulation to provide a more practical timetable.
For now, the existing PMB framework remains in force. The CMS intends to issue guidelines to help define benefits and protect members’ entitlements, but when the revised package will be ready remains anyone’s guess.
