By Satish Antony: Chief Analytics and Strategy Officer, AfroCentric
Koliwe just celebrated her 25th birthday. She also completed her six-month probation at an events management company and is now a full-time employee — albeit as a junior. This is significant for her because over 40% of her peers—those aged 25 to 34—are unemployed.
While she is organised, financially literate and healthy, she has decided not to join a medical scheme, even though she has aged out of her parents’ medical aid. She doesn’t join because she’s reckless or indifferent to the cover: she’s run the numbers and can’t afford it.
And this presents a particular challenge across Africa and particularly in South Africa: While we have this month commemorated the history of the youth in leading protest and driving change over the decades, we still cannot reap the “demographic dividend” if young people are less healthy and cannot afford even basic healthcare insurance.
For many young workers, a salary arrives before financial leeway does. Experian analysts describe this cohort as a “credit invisible generation”: they are earning but have no repayment history, no long-standing accounts, no asset-backed credit and no formal data trail — they are invisible to it.
Experian’s latest figures show her age group holds only 10% of active credit accounts and 4% of national consumer debt. Not because they don’t need credit, but because they can’t access it on reasonable terms. So they make trade-offs: putting disposable income toward essentials like transport (a car for work) and opting out of expenses like medical cover that requires cash she doesn’t have.
She is not alone. Data from the Council for Medical Schemes (CMS) shows a clear decline in medical scheme participation among 25–34 year olds over the past decade. This generation is not leaving private cover—they were never able to enter it.
This is a problem for Koliwe, though she is fit and healthy, and it’s a problem for a young country like South Africa. The problem is obvious: young, healthy people, if part of a scheme, pay in more than they claim back. Older or sicker members claim more than they pay in.
So young members, lower-cost members and their contributions, help keep the scheme affordable. Fewer young people in the pool means more older people with greater healthcare demands. The result is premiums must go up to fund those claims with effects that ultimately spread through the healthcare ecosystem and the economy itself.
The nation is operating a healthcare model built around those who can afford it, which is mathematically unsustainable. Private cover will become even more divorced from reality, expanding the gap between those who can afford it and those who can’t, putting more pressure on the overstretched public health system. By ignoring who isn’t in the system, we are only addressing the symptoms, not the cause. Koliwe’s situation is both the symptom and the cause.
The challenge we face is stark. The number of uninsured people is enormous and growing: South Africa has 4.7 million unemployed young people (15–34) — a number that does not include the many low income workers who also cannot afford medical insurance.
An obvious answer is a national health insurance policy (NHI). However, government’s NHI proposals remain long-term and without a confirmed implementation timeline. Our existing private medical schemes are efficient, reliable and willing to implement solutions: low-cost benefit options (LCBOs) for primary healthcare, excluding expensive Prescribed Minimum Benefits (PMBs), and hospital cover at lower premiums.
The government has raised several concerns, including that LCBOs would result in inferior benefits and that the existing schemes would simply continue to extract profits while shifting the cost burden of chronic conditions back to the state.
This could be resolved by acknowledging the urgent need for viable options in the here and now and by regulating the clinical pathway for tertiary, high-cost care in the public sector to go through formal, paid Public-Private Partnerships (PPPs).
The LCBO would focus on primary care, preventive screenings and rapid emergency / trauma stabilisation. Administrative efficiencies, another concern, would be addressed by standardising the benefit packages across all administrators and using common digital platforms.
A collaborative strategy would be to implement a transitional safety net that enables LCBOs to operate for up to 10 years. The model would bring young, low-claiming people under the private funding umbrella, with the aim of graduating them into entry-level schemes offering full PMB cover. This will provide operational certainty and allow actuaries to design and price sustainable options.
The proposed LCBOs would not operate as a “permanent parallel” system, but as an entry point to standard medical aid schemes. It would be stress-tested against strict eligibility rules, clear transition routes to achieve standard cover plans, and alignment with the public health infrastructure.
Such a transitional safety net actually supports the embedding of integrated health, wealth and wellness solutions. Rather than treating medical schemes, life insurance and primary care as separate products, this approach integrates mortality, savings, and healthcare claims data into a single ecosystem.
In an integrated health and wealth framework, risk statistics can be analysed alongside aggregated healthcare claims to identify early indicators, helping us design preventative health interventions and shift the model’s focus from fee-for-service care to preventative, value-based healthcare.
South Africa is a young country, but its medical schemes are not. The decline in new entrants isn’t marginal, it’s a defining gap in South Africa’s health-coverage landscape. This is a structural failure, not a cyclical one.
Every Koliwe who doesn’t join is a low-risk life missing from the pool, which raises the pool’s average age. Because she stays out, it’s a pool that has stopped replenishing itself and in which premium increases have repeatedly outpaced inflation, often approaching or exceeding double digit levels, pricing out the next Koliwe.
Our nation cannot build a sustainable health-coverage future on a model that a generation can’t afford to join. The question is whether we design them in or keep pricing them out. The system doesn’t need Koliwe to care more about insurance. It needs a core health insurance product to be something she can afford to care about.