Medical aid increases and economic pressures: why financial planning is now a health priority

As the year-end medical aid review season approaches, South Africans are facing premium increases averaging between 8% and 12%, according to the Council for Medical Schemes (CMS). These hikes come amid mounting financial strain, inflation at 5.3%, food prices up 9% year-on-year, and electricity tariffs rising 29% since 2023. To put these figures in perspective, medical inflation has outpaced general salary increases by approximately 3% to 5% annually over the past five years, significantly impacting disposable income and highlighting the urgency of strategic healthcare financial planning.

The result is a shrinking household budget and growing anxiety about affordability and maintaining a lifestyle in 2025.

But beyond the rand-and-cents impact, experts warn of a parallel psychological crisis.

Imagine a family gathered around their kitchen table, bills spread out before them, each paper a reminder of the tough decisions they need to make to keep everything afloat. This is the reality for many, where balancing the rising costs of medical aid with everyday expenses seems daunting. A 2024 Momentum–Unisa Household Index reports that 62% of South Africans experience financial anxiety, while the South African Depression and Anxiety Group (SADAG) links money-related stress to rising rates of burnout and health issues.

Health and wealth are interlinked.

“Medical aid increases often trigger a deeper emotional response than most people realise,” says Byron Geddes, Financial Adviser at ASI Wealth.

“When costs rise faster than income, people experience a sense of loss of control and that directly affects mental wellbeing. Without proactive planning, the emotional toll can lead to poor financial decisions, ultimately risking both financial stability and health coverage. However, financial planning, when done holistically, restores that sense of control and offers peace of mind. By addressing potential pitfalls early, individuals can safeguard against potential loss while simultaneously enhancing their financial resilience and mental health.”

Geddes explains that financial stress activates the body’s “fight or flight” response, elevating cortisol levels and impairing decision-making. This can lead to financial avoidance, where people delay essential planning or downgrade medical cover in panic , often to their long-term detriment.

“At ASI Wealth, we approach planning as both a financial and psychological process,” says Geddes. “By combining health data, behaviour insights, and independent financial modelling, we help clients make decisions that protect their wellbeing — not just their wealth.”

Practical guidelines for South Africans in 2025

• Reassess your medical aid structure. Many households overpay for day-to-day cover and underinsure for major medical events. Align your plan with actual health needs.
• Budget proactively for premium increases. Adjust discretionary spending now to absorb upcoming hikes without destabilising your financial goals. By taking control early, you can transform what might feel like a frantic December into a month of choices and opportunities, ensuring you focus on what truly matters to you and your family.
• Integrate healthcare into your wealth plan. Rising medical costs can undermine savings and investments unless managed as part of a holistic financial strategy.
• Use tax tools wisely. Medical tax credits, retirement annuities, and Section 12T investments can offset part of your healthcare burden.
• Choose independent, multi-provider advice. Independent advisers like ASI Wealth can compare multiple insurers and medical aid schemes, ensuring objective recommendations that prioritise the client, not the product.

Independence and psychological insight: The ASI Wealth Advantage

Unlike tied agents who represent a single provider, ASI Wealth operates independently, offering access to multiple insurers, investment platforms, and medical schemes. This objectivity and flexibility are crucial when balancing health needs with affordability in a volatile economy.

“Our independence allows us to create fully customised plans that align financial goals, medical needs, and mental wellbeing,” says Geddes. “We don’t just help clients save money, we help them find peace of mind in uncertain times. As you approach 2025, you can face what it holds with informed calm, knowing you have a strategy that supports both your financial and mental health.”

About ASI Wealth

ASI Wealth is an independent South African financial advisory firm specialising in holistic financial and healthcare planning. Combining behavioural psychology with tax efficiency and wealth strategy, the firm helps individuals and businesses build financial resilience and emotional well-being in an evolving economic environment.