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Two medical schemes fail to maintain prescribed solvency
ratioLevels have deteriorated across the board, and the industry is ‘still underpriced’
says Council for Medical Schemes.

By Roy Cokayne · 10 Dec 2025 04:01

Medical scheme members can expect the matter of underpricing to be ‘incrementally addressed through pricing adjustments’ over time. Image: AdobeStockMedical scheme members can expect the matter of underpricing to be ‘incrementally addressed through pricing adjustments’ over time.

Two medical aid schemes – Medihelp and Compcare – failed to maintain their solvency ratios at or above 25% in 2024, the minimum statutory level prescribed in the Medical Schemes Act.

This is revealed in the Council for Medical Schemes (CMS) Industry Report 2024, released last week.

The report shows that Medihelp’s solvency ratio was 33.93% in 2022, deteriorated to 23.84% in 2023, and fell further to 20.99% in 2024.

Compcare Medical Scheme’s solvency ratio deteriorated from 25.14% in 2023 to 21.83% in 2024.

The report states that 4.93% of beneficiaries in open schemes were covered by Medihelp and Compcare Medical Scheme in 2024, and that no restricted medical schemes failed to meet the minimum required solvency level at the end of 2024.

In 2023, Medihelp, Sizwe Hosmed Medical Scheme and Transmed Medical Fund failed to maintain their solvency ratios at the required minimum level.

Transmed inches up
Transmed Medical Fund attained a 25% solvency ratio during 2024, according to the 2024 CMS Industry Report.

It improved its ratio from 17.7% in 2022 to 23.79% in 2023.

However, the latter was at least the fourth consecutive year it failed to comply with the prescribed minimum after achieving a ratio of 19.72% in 2021 and 22.37% in 2020.

Provisional curatorship for Sizwe Hosmed

The CMS said in September it had obtained a Gauteng High Court order to place Sizwe Hosmed Medical Scheme under provisional curatorship and had appointed Lebogang Mpakati as the provisional curator.

It said it was common cause that Sizwe Hosmed had been experiencing financial difficulties and its solvency level had declined to a level far below the statutory requirement of 25%.

It said the scheme was recently informed by the South African Local Government Bargaining Council that it had not been granted accreditation to market the scheme and benefit options to local government employees for the 2026 year.

The CMS said Mpakati was expected to investigate Sizwe Hosmed’s financial position and advise on viable solutions and the future of the scheme, including a merger, liquidation, or continued existence.

Last week Mpakati indicated that the scheme had restored provider access and improved its claims processes – but despite the scheme having made “substantial progress” in stabilising its operations, its challenges remain.

Overall industry solvency ratio down

The CMS Industry Report said the overall industry solvency ratio of 40.87% in 2024 exceededed the minimum required, but showed a decline from 43.94% in 2023.

The solvency ratio of open schemes decreased by 2.68% to 33.36% in 2024 from 34.28% in 2023.

Restricted schemes experienced a decrease of 10.87% in their solvency ratio to 50.52% in 2024 from 56.68% in 2023.

The average industry solvency ratio has deteriorated over the past three years from 59.48% in 2022 to 56.68% in 2023 and 50.52% in 2024.

The CMS report attributes the industry-wide decrease in solvency levels to the growth in reserves not keeping up with the growth in contributions.

The report said Medihelp deliberately underpriced its benefits during the Covid-19 pandemic in an attempt to provide relief to its members.

It said the scheme experienced a 3.89% decrease in its insurance revenue per average beneficiary per month (pabpm) from 2021 to 2022 compared to an average Consumer Price Index (CPI) of 6.9% during the same period.

The report said Medihelp corrected its pricing for the 2024 financial year and experienced an increase of 13.79% in its insurance revenue pabpm, compared to the average CPI of 4.4%.

It said the scheme submitted the required business plan in terms of Regulation 29, which was subsequently approved by the registrar of medical aid schemes.

The dreaded ‘death spiral’

The report noted that: “Schemes with higher demographic profiles are at particular risk of the so-called ‘death spiral’, where adjustments to price appropriate for the profile of its members might result in the unaffordability of contributions and the subsequent loss of its younger members, thereby exacerbating the effect.”

News Letter November 2025