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By Nondumiso Lehutso

Moneyweb: Financial Journalist


Priciest Discovery Health plans still losing members

Two plans, however, keep growing in double digits


The six top-end medical aid plans offered by Discovery Health Medical Scheme (DHMS) continue to lose members, with a 5% decline between the end of 2020 and the end of 2021.

The number of beneficiaries on these plans – Executive, Classic Comprehensive, Essential Comprehensive, Classic Smart Comprehensive, Classic Priority, and Essential Priority – is down 6% over the same period.

Since 2017, in other words over five years, the number of members and beneficiaries on these plans are down 24% and 28% respectively.

The rate at which members are abandoning these top-end plans has been steady since 2015, with declines of between 5% and 6%.

The impact of the Covid-19 lockdowns and the related job losses and salary cuts in 2020 meant a 10% decline in members and 12% drop in beneficiaries in that year.

These six plans had contributions in 2021 (for main members) of between R4,327 and R7,257 per month.

All plans at a glance

20212020
MembersBeneficiariesMembersBeneficiariesChange in beneficiaries
Executive7 92716 0278 23717 057-6%
Classic Comprehensive105 496223 204111 632239 654-7%
Essential Comprehensive12 23522 12112 73823 272-5%
Classic Smart Comprehensive454874467958-9%
Classic Priority74 947164 79178 484174 025-9%
Essential Priority5 07510 1295 20310 653-5%
Classic Saver316 368694 333308 970680 184+2%
Essential Saver154 565330 891141 708302 754+9%
Coastal Saver169 966380 185172 053386 250-2%
Classic Core46 937101 41448 210104 414-3%
Essential Core50 719111 20249 036107 039+4%
Coastal Core73 193165 12976 359172 129-4%
Classic Smart55 372110 25647 60294 353+17%
Essential Smart45 33752 93038 85445 490+16%
KeyCare Start6 0267 8126 1518 007-2%
KeyCare Core16 90328 46215 95026 389+8%
KeyCare Plus211 492365 033208 859365 7120%
Total1 353 0122 784 7931 330 5132 758 340
Source: DHMS annual report

The largest of those six higher-end plans, Classic Comprehensive (R5,954 per main member, which includes R1,488 to the medical savings account), has lost 35% of its members over the last five years. This number has accelerated from the 30/31% level in the last few years.

Two plans – Classic Smart and Essential Smart – have continued to see strong double-digit growth in members and beneficiaries.

Together, these plans are up by 16% and 17% respectively. Discovery describes the proposition of the Smart plans as “the most cost-effective in-hospital cover, essential chronic medicine cover plus limited day-to-day cover if you’re willing to use providers in a specified network”.

ALSO READ: Discovery defers medical aid increases for a third time

DHMS’s two largest plans which have over 527,000 members – Classic Saver and KeyCare Plus (which is restricted to a specific income band) – have maintained their growth trend.

Shifts within the overall base of members will include new members joining DHMS, existing members upgrading or downgrading within the scheme, and members leaving the scheme altogether.

Overall, DHMS saw a 2% increase in members to 1.353 million at the end of 2021. The number of beneficiaries in the scheme was up 1% to 2.784 million.

DHMS refers to Section 33 (2) of the Medical Schemes Act and says “each benefit plan is required to be self-supporting in terms of membership and financial performance, and be financially sound”.

It notes that seven of its plans did not comply at the end of 2021:

Net healthcare resultNet (deficit)/surplus
Executive(R218.5 million)(R200.5 million)
Classic Comprehensive(R970.7 million)(R728.1 million)
Classic Priority(R116.6 million)R54.3 million
Essential Comprehensive(R30.3 million)(R2.6 million)
Coastal Core(R164.5 million)R30.8 million
Coastal Saver(R250 million)R133.8 million
KeyCare Plus(R910.5 million)(R356.6 million)

DHMS says the “performance of all benefit options is monitored on a continuous basis with a view to improving their financial outcomes”.

It also notes that “when structuring benefit options, the financial sustainability of all the options and the requirements of the CMS [Council for Medical Schemes] are considered”.

ALSO READ: SA scores 45th out of 60 countries for cost of healthcare

“The different financial positions reflect the different disease burdens in each option, among many other factors,” it adds.

“The Scheme’s strategy on the sustainability of plans has to balance short- and long-term financial considerations, fairness to both healthy and sick members, and continued affordability of cover for members with different levels of income and healthcare needs.

“While the Scheme is committed to complying wherever possible with the applicable legislation, it also focuses intensively on the overall stability and financial position of the Scheme as a whole and not only individual benefit plans.”

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

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