Total monthly contributions for plans in the Discovery Health Medical Scheme (DHMS) will increase by between 8.88% and 10.96% for main members from January.
The increases are mostly skewed to the higher-end plans, with those in the Comprehensive range and the Executive plan increasing by very close to 11%. One outlier is the most comprehensive of the entry-level KeyCare plans, KeyCare Plus, which increases by a similar amount.
With the exception of the Coastal Core plan (9.94%) and Coastal Saver Plan (9.9%), contributions for all other plans will increase by just under 9%. The Classic Comprehensive Zero MSA (no medical savings account) plan falls away. In its place is the Classic Smart Comprehensive plan, also with no medical savings account. Exact differences between the two are not immediately apparent from the pricing table.
According to a pricing document made available to brokers, the weighted average increase is 9.2%. This takes into account contributions for main members, adults and children. DHMS generally shares price changes publicly in October/November.
The detailed contributions document for 2020 is available here.
Last year, DHMS attempted to consolidate the income bands for its entry-level KeyCare plans. On KeyCare Core and KeyCare Plus, it removed the middle income bracket, and on KeyCare Start, it consolidated the lower two brackets. This meant increases of between 20% and 47% for some members. It reversed the plan to consolidate these after a strong backlash. The same brackets as 2019 remain in force next year.
The circular to brokers also reveals that co-payments and deductibles will increase by 9.5%.
Given DHMS’s position in the market – it held 56.6% market share of members in September 2018, according to the Council for Medical Schemes – these price changes are far-reaching. It nonetheless continues to grow. In 2018, it added a net 41 193 members, versus a combined 9 048 decline for the next seven largest schemes (Bonitas, Momentum Health, Medihelp, BestMed, Medshield, Fedhealth, and Sizwe).
According to its annual results presentation, medical inflation from July 2018 to end-June 2019 was 10.6%. Over the past decade, this has been 10.9%, with both supply and demand-side factors contributing to the rate which is more than double the Consumer Price Index (CPI).
Because of its size and overall population dynamics, the average age of its member is trending up over time.
As members get older, there is an increase in claims. Higher-risk members also drive up demand-side inflation.
* Hilton Tarrant works at YFM. He can still be contacted at email@example.com
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