South Africa’s health-care debate often focuses on two distinct sectors: a resource-constrained public sector and a high-cost private system serving a relatively small share of the population. Yet the most pressing pressure point lies between these two extremes.
The “missing middle” — working people and families who earn too much to qualify for public health-care support but too little to comfortably afford private medical scheme cover — is growing. And it is becoming one of the most consequential risks to the sustainability of the entire system.
According to industry data, only 14%-16% of South Africans have medical scheme cover, leaving the vast majority dependent on the state public system. This statistic masks a deeper structural issue: a gradual erosion of private cover among middle-income earners who are being priced out, not by choice, but by necessity. This is often framed as an affordability challenge. In reality, it is a system-level vulnerability with long-term consequences.
When members of the missing middle exit private cover, they do not disappear from the health-care system. They shift into the public sector. The consequences extend beyond individual households.
It shifts additional pressure onto a public system that already serves more than 84% of the population, while disrupting continuity of care and compromising long-term health outcomes. These people often delay seeking care due to cost concerns, which leads to more complex and expensive health issues later. The result is a lose-lose scenario: poorer health outcomes for individuals and higher cumulative costs for the system.
It is a structural challenge that requires a deliberate and sustainable response. If left unaddressed, this dynamic will:
- widen the gap between public and private health care;
- entrench inequality; and
- reduce overall system resilience.
The instinctive response to rising health-care costs is to reduce benefits or introduce more co-payments to keep contributions manageable. While this may provide short-term relief, it introduces long-term risk. Reduced benefits often lead to delayed diagnosis, unmanaged chronic conditions and increased reliance on acute hospital care. What appears to be cost containment is, in many cases, simply cost deferral.
The objective is not to create ‘cheaper’ products, but to design options that are better matched to how people live and earn.
True affordability cannot be achieved by stripping back value. It must be engineered through smarter system design. For medical schemes, the challenge is not only to keep contributions competitive but to preserve meaningful access to quality care over time. This requires a shift away from blunt cost-cutting toward more deliberate, data-driven approaches to value.
Traditional models of fixed contributions and standardised benefit options do not always align with the financial realities of the missing middle. Many households experience fluctuating income or competing financial priorities that make rigid pricing structures difficult to sustain.
More flexible contribution models, including income-sensitive approaches where feasible, can help align cost with affordability. At the same time, risk-pooling and cross-subsidisation remain essential to ensuring that access is not compromised for those with greater health-care needs. The objective is not to create “cheaper” products, but to design options that are better matched to how people live and earn.
Affordability is shaped as much by how care is purchased as by what members pay. Network-based models, in which schemes partner with selected providers that meet defined quality and cost criteria, offer a more predictable and co-ordinated approach to care delivery. These models can reduce unnecessary variation in pricing, limit duplication of services, and improve clinical outcomes.
Importantly, they demonstrate that cost control need not come at the expense of quality. When implemented effectively, they can achieve both.
Preventive care is often positioned as a clinical priority. It is equally a financial one.
Early detection and proactive management of conditions such as hypertension, diabetes and high cholesterol significantly reduce the likelihood of costly complications later. Encouraging regular screenings, supporting treatment adherence and enabling access to primary care are among the most effective ways to manage long-term costs.
For the missing middle, where every rand matters, preventing illness is one of the most powerful tools for maintaining affordability.
One of the less visible drivers of rising costs is misaligned incentives. Providers are often reimbursed in ways that reward volume over value. Patients may not always have clear guidance on where to access the most appropriate care. Funders must balance cost containment with access. Bringing these elements into alignment is critical.
Providers should be incentivised to deliver efficient, high-quality care. Members should be empowered with information and support to make informed decisions. Schemes should structure benefits that encourage appropriate utilisation.
It is expected that the divide between public and private systems will continue to widen, making equitable access to quality care increasingly difficult to achieve. Closing this gap requires a different mindset
When incentives are aligned, waste is reduced, outcomes improve, and affordability becomes more achievable.
Innovation in health care is frequently associated with new technologies or high-end treatments. But for the missing middle, innovation must be practical and purposeful. This includes:
- benefit designs that prioritise essential cover while maintaining access to quality hospital care;
- clearer care pathways that reduce unnecessary costs; and
- digital tools that improve access and convenience.
Virtual consultations, for example, can lower barriers to primary care. Managed care programmes can support patients with chronic conditions more effectively. Data analytics can help identify risk earlier and intervene sooner.
These are not abstract concepts. They are tangible levers that can make health care more accessible and sustainable.
The missing middle problem is not one that medical schemes can solve in isolation. It reflects broader economic realities, including income inequality, employment patterns and the rising cost of living.
Addressing it will require co-ordinated action across the ecosystem, including regulators, providers, employers and policymakers. Medical schemes, however, have a critical role to play. Through risk management, care co-ordination and value-based purchasing, they are uniquely positioned to drive meaningful change.
The real risk is not simply that more people will lose access to private health care. It is expected that the divide between public and private systems will continue to widen, making equitable access to quality care increasingly difficult to achieve. Closing this gap requires a different mindset. Affordability cannot be treated as a trade-off against quality. It must be built into the system’s design.
For the missing middle, the stakes are high. But so is the opportunity. With the right interventions, South Africa can create a more inclusive, resilient health-care system that delivers value without compromise.
• Aron is principal officer at the Medshield Medical Scheme
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.