Discovery announces medical aid increases

Discovery Health has announced its finalised contribution increases for the Discovery Health Medical Scheme (DHMS) . These will only be in effect from October to December. The changes were to take effect from May, but Discovery said it would defer them to October.

SA’s largest medical aid provider originally told members in October last year that contributions for 2022 would increase by 7.9%, but that this would only be effective from 1 May. It said this “was to maintain short-term affordability for all our members”.

DHMS says its contribution increase, effective 1 October, will remain at May’s planned level, “to make sure contributions remain on par with future medical inflation while giving [members] financial relief through a delayed increase”.

It sent communication to members last week informing them that details on contribution changes would be made available soon.

Because the increase is only in place for three months – a quarter of the year – the annualised increase across the whole of 2022 is effectively around 1.98%.

The actual effective “annual” increase for members was 2.9% last year, because Discovery deferred increases to mid-year.

The average increase (unweighted) from October across all its plans is 7.94%, right on the edge of what would not be an 8% increase (i.e. 7.95%).

The increases on DHMS’s various plans range from 7.85% to 7.98%

Last October, Discovery said its estimate for medical inflation for this year of 7.9% was made up of a 4.4% increase in the cost of healthcare services (tariff inflation), an increase in claims of 1.5% (utilisation changes) and 3% due to changes in the demographic profile of the scheme (demographic risk). Discovery said this was unaffected by Covid.

Projected medical inflation for 2022 totalled 8.9%. This was then offset by a 1% reduction in expected future claims in “benefits derived from risk management and Vitality”. It is able to pass on the savings from incentivising members to be healthier.

This year was the third time DHMS had delayed its contribution increases since the onset of the Covid pandemic.

In 2021, it deferred increases to July and originally deferred planned contribution increases for 2022 to May, which then became October.