By Will-John Keevy,
It’s that time of year when medical schemes announce their contribution increases for 2027. The Council for Medical Schemes has recommended that schemes anchor increases at 3.8%, plus a reasonable allowance for higher healthcare use. Most schemes, however, are expected to go higher because of medical inflation, rising claims costs, and greater use of healthcare services.
This news will be particularly unwelcome for the many households already grappling with rising living costs as well as historically high fuel prices. With budgets already stretched, you are not alone if you are looking at your medical aid contribution and wondering whether it’s worth it. But cancelling your cover to save money now could cost you far more later.
Medical aid should be viewed as more than just another monthly expense. It plays an important role in protecting your savings and income from unexpected healthcare costs. Professional financial advice can help you understand how your healthcare cover fits into your broader financial plan, ensuring that decisions about cover are balanced against your other financial commitments and long-term goals.
Every financial plan relies on a few basic assumptions: that your income continues, your savings keep growing, and your expenses stay reasonably predictable. A serious illness can upset all three at once.
Cancer is a sobering example. The International Agency for Research on Cancer estimates that around 102,000 South Africans were newly diagnosed with cancer in 2024, and that roughly 241,000 people were living with the disease. Projections from the Global Burden of Disease study suggest that annual cancer deaths in South Africa could almost double by 2050, largely because of an ageing population and changing lifestyles. The cost of a cancer diagnosis – which includes specialist visits, treatments and even surgical procedures – can exceed millions.
Momentum Life Insurance’s claims show that critical illness payouts rose by more than 15% in 2025, passing R1 billion for the first time. Cancer accounted for 43% of those claims and was also the leading cause of lump-sum disability claims, at 27%.
The good news is that medical advances mean many people now survive a serious illness. The financial challenge is paying for treatment, recovery, and ongoing care. However, without medical aid, hospital admissions, specialist consultations, and treatment costs fall directly on you and can quickly add up. For households without medical aid cover, that means using emergency savings, taking on debt, or drawing on retirement savings – essentially solving today’s problem by borrowing from your future.
Medical aid is a critically important layer of protection
Medical aid is designed to absorb large, unpredictable costs, especially hospital admissions and serious illness. Registered schemes must also cover a defined list of serious and chronic conditions, known as Prescribed Minimum Benefits, subject to scheme rules.
But medical aid isn’t designed to cover everything. Gap cover can help when specialists charge more than your scheme pays. Critical illness cover pays out a lump sum you can use however you need, whether for costs your medical aid doesn’t cover, changes to your home or replacing income while you recover. This layer is often missing. Of Momentum Life Insurance clients who died from cancer or cardiovascular conditions in 2025, 87% did not have critical illness cover in place with Momentum.
Downgrade rather than cancel
If your budget is under real pressure, consider moving to a more affordable option rather than giving up your cover entirely. Cancelling can leave you exposed at exactly the wrong moment, and rejoining later may mean waiting periods and, depending on your age, late-joiner penalties.
The first step is to find out what your specific option will cost and cover in 2027. What benefit changes has the scheme announced? Second, does your medical aid plan still match your needs? Does it cover chronic medication, planned procedures, a baby on the way or growing children? Third, check whether you are paying for benefits you rarely use, or missing benefits you’re likely to need.
But the decision shouldn’t be made in isolation. An unexpected medical expense can quickly eat into emergency savings, disrupt debt repayments or force someone to reduce retirement contributions, potentially setting back other financial goals. This is why healthcare costs need to be considered as part of the broader financial plan, rather than simply as another monthly expense.
A financial adviser who understands your personal circumstances can help you weigh the cost of your medical aid against your income, savings, existing protection and longer-term financial goals. This is especially important before cancelling or reducing insurance cover to free up money in your monthly budget. An adviser can help you assess the risks, explore more affordable alternatives and understand how changes to one part of your financial plan could affect the rest.
Momentum’s financial advice research has also found that households working with a professional financial adviser have investments that are 9.5 times larger than those without an adviser. While this does not mean that advice guarantees better outcomes, it highlights the potential value of taking a holistic approach to financial planning.
Before making decisions under financial pressure, speak to your financial adviser. The right guidance can help you balance immediate affordability with the need to protect yourself and your family against unexpected financial shocks.
The right decision isn’t necessarily the cheapest option, but the one that provides an appropriate level of protection while still working within the realities of your overall financial plan.
Will-John Keevy, Provincial Head: Momentum Financial Planning
