More than half of Discovery’s medical aid plans saw declines in members last year

 A full nine of the 16 core Discovery Health Medical Scheme (DHMS) medical plan options saw declines in members in 2024 from 2023. This is according to the scheme’s annual report, which was released ahead of its AGM at the end of June.

Seven of its core plans saw increases, but one of these was for the new Classic Smart Comprehensive plan which was launched in 2023 (it removed its Essential Comprehensive plan in 2023).

The 16 core plans exclude any “efficiency” discount options, such as Delta and Regional plans, which provide cover at specific networks of hospitals.

Overall, DHMS saw a net membership decrease of 1.05% in the 2024 calendar year and a net beneficiary decrease of 1.9%.

It ended the year on 1.359 million members and 2.735 million beneficiaries. Between December 2024 and January 2025, 94.89% of members did not change plans, while 2.89% were upgraded and 2.23% were downgraded.

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Four plans saw year-on-year declines in excess of 5%, with two of its largest plans, Classic Comprehensive and income-limited KeyCare Plus, seeing year-on-year declines of 7% and 11% respectively. Its Classic Comprehensive has seen declines in members and beneficiaries for a number of years now.

As a measure, in the Covid-19-hit 2020, it ended the year with 111 632 members on Classic Comprehensive. That means it has lost 26% of the member base on that plan in four years.

The average age of DHMS members has crept up to 37.59 (from 37). It says “an increase of less than one year per annum is favourable as this indicates that young people are joining the Scheme”. This is a major looming problem for the scheme.

Practically, its only growth over the last decade has been from taking on the administration of restricted schemes, like Bankmed and Sasolmed.

DHMS says “consistent with the stagnant South African economy, the medical scheme industry has also remained stagnant over the past decade, with a slight increase in membership of 0.98% in 2023 compared to 2022”.

This means that, structurally, the industry and DHMS as the largest scheme have a looming problem: members are ageing.

In the last 16 years, the average age of lives covered by DHMS has jumped from 32.3 to 37.6.

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Targeting young professionals

In an effort to address this, it launched a new Active Smart Plan with a contribution of R1 350 per month, specifically to target young professionals.

It says this is the most affordable option in the open scheme market.

Research by Discovery Health shows that “for members aged 20-29, approximately 7% of their income goes toward medical scheme contributions, whereas for older working adults approximately 4% or lower of their monthly income goes toward medical scheme contributions”.

It estimates that 109 000 uncovered young professionals would take up medical scheme cover if there was an affordable option and where contributions amount to roughly 5% of their income.

Its Smart plans, which target young professionals (mostly) with young families, remain the fastest-growing plans across its portfolio. Classic Smart grew members by 10% last year, while Essential Smart grew by 26%. Both plans ended 2023 with around 72 000 members, making them larger (by members) than all but four other Discovery medical aid plans (excluding the income-linked KeyCare Plus plan).

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Contributions

DHMS contends that its contributions are 12.7% “more affordable than the next seven largest open schemes across all plan categories in 2025”.

On extensive day-to-day plans, its contributions are 8.2% lower and on limited day-to-day plans, they are 16.5% lower.

It says it continues to “provide exceptional claims cover for members”.

In 2022, DHMS paid 96% of in-hospital claims versus 91% for all other open schemes. Detailed data for 2023 has not yet been released by the Council for Medical Schemes.

Source: DHMS

DHMS notes that utilisation rates have returned to pre-Covid 19 levels. It saw a 7.48% increase in net claims.

It says “claiming patterns are influenced by a changing burden of disease, demographics and benefit design”.

“Based on an analysis of the Scheme’s claims experience, cardiovascular remains the disease episode with the highest risk spend, accounting for the highest proportion of the Scheme’s overall claims cost.

“While tumours have surpassed musculoskeletal claims (which have remained proportionally consistent from 2022 to 2024), increase in the former is partially driven by benefit availability.”

This article was republished from Moneyweb. Read the original here.