Priciest Discovery Health plans still losing members

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

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”.

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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 result	Net (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”.

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“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.