Costly schemes dumped
DISCOVERY HEALTH: 22% MEMBERS SHIFT OVER THE PAST FIVE YEARS
Overall member base continues to grow, increasing by 13% from 1.19 million in 2013.
Members have been ditching the top three tiers of Discovery Health Medical Scheme (DHMS) plans, with 22% of that base disappearing in the past five years.
The top plans – Executive, Comprehensive Series and Priority Series – account for 19% of the medical scheme’s 1.35 million members, down from 28% in 2013.
Every plan across these top tiers has shown declines in members and beneficiaries over this period, with the exception of the Classic Comprehensive Zero MSA (medical savings account) plan, which has a tiny base of under 1 000 members. Together, these plans have lost 72 000 members to end last year on 256 975.
The number of beneficiaries across these top three tiers has declined by 26% (or 194 411).
Contributions on the Executive plan start from R6 541 per month, while Comprehensive series plans start at R4 026 and Priority series plans start at R3 010 per month.
The scheme’s Classic Comprehensive plan has been hardest hit with a (net) loss of 44 493 members and 124 636 beneficiaries across the five years.
These are declines of 25% and 30%, respectively.
It is notable that the only new plan announced by DHMS for next year is the Classic Smart Comprehensive plan.
Classic Smart Comprehensive, which will offer cover across a specific network like the existing Smart plans, will be significantly less expensive than the other Comprehensive plans (all 2020 pricing):
Classic Comprehensive – R5 954
Essential Comprehensive – R5 003
Classic Smart Comprehensive – R4 327
The shift away from high-end plans comes as Discovery’s overall base continues to grow.
The number of members has increased by 13% from 1.19 million in 2013.
The number of beneficiaries is up by 10% to 2.82 million as at the end of last year.
This makes it the largest open medical scheme in South Africa, with 56.4% market share (excluding restricted schemes).
Changes across its base are, therefore, material.
There has been decent growth in the new Smart series plans (launched initially as a single plan in 2016).
Discovery says these offer 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”.
Together, these plans already have 53 000 members (and 84 000 beneficiaries).
The low beneficiary-to-member ratio (1.58), together with the average age of Classic Smart beneficiaries (29.86) shows that younger adults (typically single or couples, as opposed to families) have found this plan attractive.
The lack of a medical savings account limits its attraction for families.
These shifts across the base are comprised of new members joining the scheme, existing members upgrading or downgrading within the scheme, and members leaving the scheme.
Hilton Tarrant works at YFM