Top-end Discovery medical aid plans to increase by 10%

Discovery Medical Aid Scheme (DHMS), the country’s largest, has announced its annual contribution increases for 2023. The changes take effect from April (not January) because of the strong solvency within the scheme. This is the third year running where it has deferred annual contribution increases for members.

The contributions on top-end plans, which provide extensive day-to-day cover – being Executive, Comprehensive and Priority – will increase by 9.9% from 1 April (actual increases average 9.93%). Contributions on Saver, Smart, Core, and KeyCare plans (limited and hospital cover) will increase by 7.9%.

Dr Ryan Noach, CEO of Discovery Health, says: “The differentiated increase across plans takes into account the higher disease burden on the Priority, Comprehensive and Executive plans, reflected through higher hospital admissions, oncology claims and chronic illness costs.

ALSO READ: Discovery delays 2023 medical aid increases to April

“The increases on these plans allow the scheme to maintain the industry-leading value of the benefits at contributions that are on average 19.8% below industry contributions for equivalent benefits.”

Discovery contends that the vast majority of DHMS members – a full 85% – will “experience a 7.9% increase in their contributions, while the remaining 15% of members will experience a 9.9% contribution increase”.

Noach says: “This represents a highly competitive weighted average increase in contributions of 8.2% for 2023, whilst sustaining contributions in line with medical inflation in DHMS.”

Because the increases are only effective in April, the average increase across the 12 months of 2022 is 5.9% for Saver, Smart, Core, and KeyCare members and 7.4% for those on Executive, Comprehensive and Priority plans.

The deferral of increases annually since 2021 has reduced contributions by R8.6 billion since the Covid-19 pandemic. Noach says: “This has limited increases for members to 1.9% above CPI over this three-year period, significantly below the prevailing medical inflation which is 3% to 4% above CPI.”

Discovery says “the contribution increases for DHMS in 2021, 2022 and 2023 have ensured that contributions remain in check with medical inflation, underpinning sustainability and mitigating risks of the scheme showing losses, and ultimately requiring price catch-up”.

ALSO READ: Priciest Discovery Health plans still losing members

“The deferral of the increases utilising the higher solvency as a ‘shock absorber’ has the effect of reducing the effective annual increases for members. This strategy allows the scheme to maintain its long-term sustainability, avoid future price shocks and benefit cuts, and addresses affordability for members.”

It points to the growth in DHMS over the last two years: since January 2021, it has grown by 47 500 beneficiaries. During this time, it says that the membership bases of most of its competitors have shrunk.

“The health of members joining the scheme represents a flight to quality and is critical for the sustainability of the scheme. Considering that the new members joining the scheme are on average younger and healthier, for every 1% annual growth in the membership, the scheme benefits from a 0.5% reduction in the cost of claims.”

It has also used some of the excess capital in the scheme to provide up to R10 000 of additional healthcare services – primarily screening – per family until December 2024 in its once-off Wellth Fund benefit.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.