Discovery members abandoning pricier medical plans

With the Council for Medical Schemes annual report for 2019 being published last month, it is now clear that the decline in members at the top end is accelerating (Discovery does not disclose the breakdown of members and beneficiaries across its plans).

The decline between 2018 and 2019 jumped to 8%, from around the 5% level in preceding years.

Every plan across these top tiers has shown declines in members and beneficiaries over the past year (and over the six-year period), with the exception of the Classic Comprehensive Zero MSA (Medical Savings Account) plan, which has a tiny base of under 1 000 members. Across the six years between 2013 and 2019, 28% of members – or nearly 91 000 – have ditched these plans.

The largest of the top-tier plans by members – Classic Comprehensive, with a main member total contribution of R5 954 per month currently – has lost nearly 55 000 members and over 150 000 beneficiaries since 2013.

That’s a 31% decline in members over the six-year period.

Some of these members will have emigrated and left the scheme completely, while others would have downgraded their plans. Movement within the scheme includes new members joining, existing members upgrading or downgrading, and members leaving. In a stagnant economy with formal employment growth all but stalled in recent years, the movement across the different plans is not at all surprising.

The other five-digit decline in members was in the higher tier of its entry-level KeyCare plans, KeyCare Plus. These plans (there are different options depending on income) lost over 11 000 members between 2018 and 2019. The two coastal plans, which offer cover only at hospitals in the four coastal provinces – Northern Cape, Western Cape, Eastern Cape and KwaZulu-Natal – have seen a (net) decline of over 6 000 members.

Plans that have Delta variants are included in the ‘main’ plan.

Source: Council for Medical Schemes annual reports

Four plans have shown practically all the growth in the year: Classic Saver, Essential Saver, Classic Smart and Essential Smart.

Three of the four added over 8 000 members. Classic Saver, which is DHMS’s largest plan by members (310 000) and beneficiaries (680 000), has a total monthly contribution of R3 290 per main member currently. It added 7 324 members in the year to end-2019 and has grown by 83 517 since 2013. Essential Saver (total contribution of R2 615) added the most, with an increase of 8 792 members in 2019.

The two Smart plans – Classic and Essential – each added around 8 500 members in the year. These have seen substantial increases since they were launched in 2016 and 2017 respectively. When launched, Discovery articulated the proposition thus: “The Smart Plan embraces the dynamic world of digital technology, empowering you to manage your health plan.” There are no medical savings accounts on the Smart plans, and private hospital cover is across a network of hospitals only (excluding emergencies).

Despite DHMS increasing its overall member base by 866 in the year (or 0.06%), the number of beneficiaries on its plans declined by 11 000 to 2.8 million in the year.

It remains the largest open medical scheme in the country, with 56.4% market share (excluding restricted schemes) as at end-2019.

• This article originally appeared on Moneyweb and has been republished with permission.