Discovery Health’s 2020 medical aid increases

Members can expect to pay up to 11% more ….

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%. Discovery contends that “Only 19% of members will have the 10.9% increase, while 60% of members will have an 8.9% increase.”

One outlier is the lowest income band of the most comprehensive of the entry-level KeyCare plans, KeyCare Plus (R0-R8550), 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.

Discovery cites a market survey of financial advisors representing over 250 000 lives, which shows that “market expectations are for increases between 10% and 12% across the industry”.

“Following the success of its digitally enabled, network-based Smart Series, the Scheme has extended the design to its Comprehensive Series, to offer families attractive options for efficient, affordable comprehensive cover in 2020.”

According to a pricing document made available to brokers, the weighted average increase is 9.5%. This takes into account contributions for main members, adults and children. DHMS generally shares price changes publicly in October/November.

Main member monthly contribution (per salary range where applicable)
Plan	2019	2020	Increase
Executive Plan	R6 541	R7 257	10.95%
Classic Comprehensive	R5 368	R5 954	10.92%
Classic Delta Comprehensive	R4 834	R5 362	10.92%
Essential Comprehensive	R4 509	R5 003	10.96%
Essential Delta Comprehensive	R4 062	R4 507	10.96%
Classic Smart Comprehensive	–	R4 327	–
Classic Priority	R3 501	R3 814	8.94%
Essential Priority	R3 010	R3 278	8.9%
Classic Saver	R3 021	R3 290	8.9%
Classic Delta Saver	R2 412	R2 628	8.96%
Essential Saver	R2 400	R2 615	8.96%
Essential Delta Saver	R1 915	R2 085	8.88%
Coastal Saver	R2 373	R2 608	9.9%
Classic Smart	R1 794	R1 954	8.92%
Essential Smart	R1 285	R1 400	8.95%
Classic Core	R2 248	R2 449	8.94%
Classic Delta Core	R1 799	R1 960	8.95%
Essential Core	R1 931	R2 104	8.96%
Essential Delta Core	R1 543	R1 681	8.94%
Coastal Core	R1 770	R1 946	9.94%
KeyCare Plus R0 – R8 550	R1 088	R1 207	10.94%
KeyCare Plus R8 551 – R13 800	R1 523	R1 659	8.93%
KeyCare Plus R13 801+	R2 249	R2 450	8.94%
KeyCare Core R0 – R8 550	R871	R949	8.96%
KeyCare Core R8 551 – R13 800	R1 086	R1 183	8.93%
KeyCare Core R13 801+	R1 661	R1 809	8.91%
KeyCare Start R0 – R9 150	R839	R914	8.94%
KeyCare Start R9 151 – R13 800	R1 412	R1 538	8.92%
KeyCare Start R13 801+	R2 198	R2 394	8.92%

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.

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).

Source: Discovery Health Medical Scheme annual results presentation

“Discovery Health estimates total medical inflation for 2019 at between 10.5% and 12.5%, with the variance due to utilisation trends on the different health plan options. However, risk management by Discovery Health and the ongoing positive impact of Vitality on engaged members’ health, reduce medical inflation by 1.6%, resulting in plan specific contribution increases between8.9% and 10.9%.”

Because of its size and overall population dynamics, the average age of its member is trending up over time.