The 2024 CMS Industry Report is now available!

For the first time in three years, the Council for Medical Schemes (CMS) presents the 2024 Industry Report as a single, consolidated publication! This report offers an in-depth look at South Africa’s medical schemes sector, highlighting trends in membership, healthcare utilisation, expenditure and overall financial performance.

By linking healthcare patterns with financial outcomes, it provides stakeholders, policymakers, and members with a deeper understanding of the forces shaping the industry.

Industry overview: Membership and demographics

The medical schemes environment remains stable but continues to show slow growth and gradual ageing of its beneficiary base.

• The industry covered 9.17 million beneficiaries in 2024, a marginal increase of 0.45% from 2023.
• The average beneficiary age increased from 32 years in 2023 to 34.2 years, with open schemes reflecting an older profile (36.4 years) compared to restricted schemes (31.8 years).
• Gauteng remains the largest contributor to membership at nearly 40%, followed by the Western Cape (15.5%) and KwaZulu-Natal (14.4%).

Healthcare utilisation and benefits paid

Healthcare utilisation continued to rise in 2024, driven by demographic shifts, increased demand for care, and the return to normal treatment patterns after the pandemic.

Total benefits paid

• Total healthcare expenditure on benefits paid in 2024 increased to R259.3 billion, up by 8.52% from 2023.
• Benefits paid per beneficiary increased by 7.84%, reflecting higher utilisation and increased service costs.

Where the money goes

• Hospital expenditure remains the dominant cost driver, at 35.95% of total benefits, with the cost per admission increasing by 9.88% despite fewer admissions.
• Expenditure on all specialists accounts for 28.02%, followed by medicine dispensed at 14.05%, and then supplementary and allied health professionals at 8.47% with restricted schemes showing higher utilisation of GPs, allied health professionals, and medicines.

Out-of-pocket payments

The data shows a growing reliance on personal funds to cover gaps between benefit limits, tariffs, and actual provider charges, as:

• OOPs increased by 3 billion, highlighting continued affordability pressures.
• A large portion went to medicines and consultations, particularly when non-DSP providers were used.
• Members also paid directly for diagnostics, specialist visits, and allied health services, driving year-on-year growth.

Financial Performance: Stability Amid Cost Pressure

Despite rising healthcare costs, the medical schemes industry remained financially sound in 2024.

Solvency and reserves

• The industry recorded a solvency ratio of 40.87% which exceeds the minimum required solvency level of 25%. Restricted schemes maintain stronger solvency positions than open schemes, although both remain stable.

• Net assets increased to R109.24 billion as a result of favourable investment markets, and all schemes incurred a net surplus of R3.13 billion, which is almost double the previous year. These healthy reserves are good news for members, as they ensure that schemes can pay claims on time and remain stable during periods of rising healthcare costs or unexpected shocks.

Insurance revenue and expenditure

• Insurance revenue per average beneficiary per month increased by above CPI (4.40%), as schemes continue multi-year adjustments following post-COVID under-pricing.
• Relevant healthcare expenditure increased by 9.03%, outpacing contribution growth.

For every R100 collected in insurance revenue, schemes spent:

• R96.18 on healthcare claims

• R6.89 on directly attributable insurance service expenditure

This resulted in a shortfall of R3.07, which was covered through investment income and built-up reserves.

What is driving claims growth?

• Unregulated tariffs and provider pricing.
• Higher utilisation levels, partly due to an ageing membership profile.
• Increased post-COVID return to care and postponed treatments.

Strategic priorities for a sustainable industry

To ensure long-term resilience and protect members, the CMS is focusing on several key areas:

• IFRS 17 implementation to enhance financial reporting transparency and comparability.
• Sustainable pricing and benefit reviews to correct under-pricing while avoiding steep contribution shocks.
• PMB and Primary Healthcare reform, including the development of a standardised PHC package aligned with national health policy.
• Tariff reform through a multilateral negotiating environment to improve pricing transparency and curb cost escalation.
• Stronger oversight of managed care, risk transfer arrangements, and governance practices.

Overall, the Report reflects an industry that remains financially stable despite rising costs and growing utilisation. Through its strategic priorities, the CMS remains committed to strengthening regulation, protecting beneficiaries, and ensuring that medical schemes remain transparent and responsive to the healthcare needs of all South Africans.

Download the full Industry Report for 2024 and the Annexures here.