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Members are ditching top-end Discovery Health plans

About a quarter of the base has disappeared over the past five years.

Members have been ditching the top three tiers of plans offered by Discovery Health Medical Scheme (DHMS), with 22% of that base disappearing over 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 2018 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.

Read: This is how much you need just for medical aid in retirement

It is notable that the only new plan announced by DHMS for 2020 is the Classic Smart Comprehensive plan. “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,” it says.

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 2018. 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.

Source: Council for Medical Schemes annual reports

An analysis of the Council for Medical Schemes annual reports over the past five years shows that its entry-level KeyCare series of plans has shown only very modest growth over this period, with an 8% increase to 251 951 members.

The bulk of the growth has come from its Saver series, which Discovery describes as plans that offer “the most economical in-hospital cover, essential chronic medicine cover and day-to-day benefits through a medical savings account”.

The member base across these three plans has grown by 146 318 over the past five years (31%). This equates to 92% of the 158 000 growth across Discovery’s entire base of members. The number of beneficiaries across the Saver series is up 30% to 1.35 million. This is 48% of the entire scheme’s beneficiaries.

Discovery Health Medical Scheme members

2013

2018

Change

%

 Executive

11 799

9 813

-1 986

-17%

 Classic Comprehensive

178 842

134 349

-44 493

-25%

 Classic Comprehensive Zero MSA

520

915

395

76%

 Essential Comprehensive

24 966

15 653

-9 313

-37%

 Classic Priority

103 192

89 861

-13 331

-13%

 Essential Priority

9 963

6 384

-3 579

-36%

 Classic Saver

225 984

302 177

76 193

34%

 Essential Saver

78 912

128 611

49 699

63%

 Coastal Saver

164 114

184 540

20 426

12%

 Classic Core

52 601

50 279

-2 322

-4%

 Essential Core

28 721

42 305

13 584

47%

 Coastal Core

79 508

81 100

1 592

2%

 Classic Smart

0

30 607

 

 

 Essential Smart

0

22 309

 

 

 KeyCare Access

5 853

4 599

-1 254

-21%

 KeyCare Core

15 233

14 561

-672

-4%

 KeyCare Plus

211 779

232 791

21 012

10%

 Consolidated

1 191 987

1 350 854

158 867

13%

Source: Council for Medical Schemes annual reports

* Plans that have Delta variants are included in the ‘main’ plan.

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. 

Source: Council for Medical Schemes annual reports

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.

Read: Big changes for Discovery Vitality in 2020

Hilton Tarrant works at YFM. He can still be contacted at hilton@moneyweb.co.za.

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Travelling through Vietnam. Met a couple from Malaysia. For top end medical they pay US$150 pm for high quality private health care insurance. We pay way too much in SA and more people will dump this due high direct and indirect taxes.

You could also buy international health insurance that will cover you in South Africa (although it wouldn’t technically be ‘sold’ here). The difference in those policies is, however, that you are only underwritten for a year. So if you are ill during the year your premium may be way higher the next year or they may not cover you at all. And the older you get, the higher the premiums.
I believe medical inflation experienced by scheme members in SA is way higher than the scheme contribution increase. That is because most professional services the schemes pay for are set at their artificial medical scheme rates with the balance being paid by the member. So paritcularly in disciplines where there are few specialists inflation may be way higher. For example, I think we may down to something like less than 200 cardiologists in the country.

US$150 is R2,300/month. I’m sorry, but I just don’t believe there is anywhere in the world where comprehensive, high quality private health insurance for both inpatient and outpatient, chronic and acute conditions can be had.

@SARepatriate ….there is always someone like you who opens their mouth before a researched answer

What a bore

Is there a cap witha high excess, or is it cheap with a low cap?

The Malaysian health insurance market is complex. Mix of traditional and Sharia-compliant products. There are caps on many of the products in terms of lifetime liability of the insurer and there is also, as NR notes above, the issue of annual renewal not being guaranteed, not to mention age-loaded premia. So, despite dear, learned Leah’s erudite and constructive feedback, I stand by my view that there is nowhere in the world that comprehensive, high-quality private health insurance (with premia agnostic as to age and health and with guaranteed renewal for life) can be had for R2,300 a month.

2000 – IT bubble
2008 – Property bubble
???? – Medical bubble

2020 – Mother of all credit bubbles

For how many decades have you been predicting this one now?

@Anything wrote:

“For how many decades have you been predicting this one now?”

What are you babbling about ?…..

A medical ‘bubble’ is pretty new actually !

Once again, your posting is verging on trolling again

We are watching you ‘Anything’

Learn to read and reply to the correct comment. I was clearly referring to the credit bubble predictions. Please read before embarrassing yourself.

I r watching you 2.

Responding to the wrong comment and failing to read. Clearly I was talking about the credit predictions.

Maybe watch yourself?

They don’t care !!!!!!!!!!!!!!!!!!!!!!!

Discovery management are driven by “THE NEED FOR GREED”!
IN 1991 the listed group that I was at decided to change to Discovery. I prevented the group from making the switch as my wife had been diagnosed with Multiple Scleroisis and at the time we had a night nurse fully covered by the old scheme.
1. it took Discoveryless than 5 working days to amend the rules so that they could take on over 1500 new members!
2. two years later they amaended the rules! ” discovery would only cover a nurse if you could prove that the member required medication via injection! so that benefit was terminated.
3. a few years later a call centre agent made contact to advise me that Discovery would no longer provide certain medication on the “Chronic Scheme” as it was deemed , by the Medical Panel, to be of an “experimental nature” and therfor in terms of the rules not covered! NB MULTIPLE SCLEROISIS – there is no known cure and everything around the treatment is Experimental.
4. we had the services of a “home nurse” facility who changed my wife’s catherter in the comfort of her home. discovery paid this for a couple of years. suddenly discovery refused to pay unless I used a hospital! this was despite th cost being three times higher than the home based service!

unfortunately I had to suck it all up! I was able to provide a level of care despite Discovery’s best effort to put stumbling blocks in our path.
The general theme at Discovery is:
a. chnage the rules/cover – up the profit1
b. change the algorithim on Discovery Vehicle Insurance – up the profit! my personal experience here – third party drives into me and at renewal my premium increased by 40 % as i am perceived to be a risk!!
c. Vitality Programme – change the rules – up the profit!
if there was an alternative I would be first in line!

Just because there is no cure, does not mean all treatments are ‘experimental’. Not all treatment aims to cure. Stopped taking it seriously after that.

@Anything’s reply below:

“Just because there is no cure, does not mean all treatments are ‘experimental’. Not all treatment aims to cure”

?????

Did you actually read ‘BigG”s comment properly !!???

Nowhere was he looking for a ‘cure’

The main gist of his thread is how Discovery kept changing the rules !

So, what part of his basic commentary could you not grasp !???

If one takes into account that Discovery was founded in 1992 it would seem that these ramblings lack credibility. And seriously you, in your own capacity put a stop to a listed group’s decision to change medical schemes – I highly doubt that. I also don’t agree with what these corporate giants are doing to us, we are getting poorer on a daily basis because of them but surely we can keep these comments cerebral?

Learn to read please. You are embarrassing yourself.

“there is no known cure and everything around the treatment is Experimental.”

No. Not true. Sorry. We are not subsidising your experimental stuff.

So many lies here. Joins it before it exists. Questionable claims. Still signs on for insurance and vitality despite not having medical claims paid. Claims all treatments are experiment for MS. Lol no.

Really? Some people will make up anything so that they can moan. Change medical aids. Stop signing in for more products. Stop being a victim.

I’ve never understood the idea behind the medical savings account. You give Discovery your money to keep, but they don’t pay you any interest and charge you for the privilege of administering your own money. Why not just put the money in your bond or credit card, and then at least reduce your interest payments, as opposed making Gore and his cronies even richer?

Exactly – medical aids did well and served the interest of the people -until the present day Billionaires came up with the medical savings con – and all changed from there.
If ANC had better quality managers, it may make sense to incorporate in one large med-aid scheme run by government appointed experts.

This is how insurance works; they take your money upfront. 30 days / 365 days to get interest.

A lot of clients know it is better to keep the money saved in the bank, which will then earn interest, but they don’t because of a few reasons:

1) Having savings with their medical aid makes them feel that the MSA can only be used for medical expenses and can’t be wasted on other things. Some clients aren’t disciplined enough to leave money in their bank and they therefore know exactly how much is available for medical aid expenses.

2) Clients don’t like paying with their credit/debit card and this gives the perception that they are paying extra over and above their medical aid expenses (you and I know the extra premium paid towards a savings plan is built into their monthly premium and is still their own money).

3) Clients view any plans without a savings account (such as hospital plans) as not being a full/proper medical aid and therefore think they have a lot less cover.

A lot of clients know this but choose to go with a savings plan regardless.

Put another way – you pay roughly 3 months’ contributions into the MSA at the beginning of the year. Then you submit claims that are paid back to you from the MSA (your own money). Once that’s depleted, you have the privilege of making a further 9 months of contributions and each time you submit a claim you get a code 274 – NO PAYMENT. Discovery pays for virtually nothing outside of the MSA.

A few years ago there was a yearly benefit for glasses. This, together with a host of other benefits, has now been dumped into MSA so when that’s depleted – sorry for you, claim for glasses – you guessed it code 274! Oh, and BTW your annual premiums increase by some 9%. ‘Pay more, get less’ is the Discovery way. I suppose someone has to pay for the R1bn new HO in Sandton…

This reminds me of another point though – it is cheaper to buy specs through the MSA than it is to pay cash, you don’t get the same price as Discovery if you buy privately.

In my view it is never simple; just like Medical Aid offerings that are so confusing that comparison is impossible. Eavesdropping on doctors it would appear that the major reason for “medical aid” (insurance) is the exorbitant cost of some PMB’s – cancer, serious accident, heart disease etc. Very difficult to have savings to cover these – if they strike.

But for day to day stuff, absolutely but of course government meddling means they cannot be separated out. But that same meddling is lax when it comes to enforcing performance by Discovery who employ a host of marginally legal and unacceptable strategies to avoid or reduce payment. Like most schemes.

Consents notes on my side. But these benefits are explained in your benefit guide and yet we still choose to ignore those email.
MSA is an amount given to the member upfront at the beginning of the year, and members are incontrovertible of that fund. We tend to misuse these saving to what best suits us. Then when they get depleted before time we want to say the scheme doesn’t want to cover. Perfect example: why do u have to do new glasses every year, who doesn’t know in this day and age that glasses are meant to last 24 months. Should you loose them once can claim them back because most of them come with free insurance.

We love buying over the counter medication, the scheme has a contract with pharmacies. Why not try paying cash and claiming it back from the scheme.

Did you know that cash patients are charged lower than medical aid patients?

On that note one also earns interest on their positive balances on MSA as listed on the Medical Schemes Act.

It’s an insurance for a reason.

Let’s not over look the fact that having a medical aid is security. Not everything will be covered for, these don’t just come out of the actuaries but each and every benefit gets approval from the council of medical schemes which legislates the governance of medical schemes …

There are rules every where, even in your own house you have rules. You can’t misuse something and expect to have it back.

Manage your medical savings well and one will get the rewards.

It is your money and believe in me you will earn interest according.

When one decides to go down to any plan that doesn’t have an MSA component, that money gets refunded to them.

I have received my benefit letter for 2020. I took time to read it, look at the changes on my plan type. Because at the end of the day, I would love to get the best out of my money.

Let’s not run away from responsibility.

There’s help if you don’t understand how you can utilize your medical aid well.

You do get at least a partial tax rebate for the MSA contribution if you cross the 7.5% threshold.

and a full rebate if you’re 65 or older.

What does Discovery say about the loss of high end cover customers? How much of this is attributable to the mass exodus of HNW people that can “afford” to escape? Same applies to private schools – see Curro as a case in point.
Tax base, property base, financial contributors to the efficient running of SA inc are bailing where they can, it’s only going to get worse until the incumbent government make noticeable changes for the better.

“it’s only going to get worse until the incumbent government make noticeable changes for the better.”

You have really high hopes. Gore is friend with Cyril and top ANC bras and if HNW members are leaving, NHI will just help out Discovery since Discovery pushed for it anyway.

I don’t think they’ve actually lost the clients completely – many folks are downgrading to lesser plans like Essential and buying GAP cover (not Discovery’s GAP cover as that’s far too flipping expensive – especially as you get older). GAP isn’t low-cost any longer and the restrictions of the R150,000pa (I think) imposed on them has, ironically, benefited the schemes themselves, but on average I think it beats paying for a high-end plan at Discovery.

Really? You think emigration is the key reason? You don’t think that downgrading is more significant?

I really think we are paying a fair price. People forget that we are not in a 1st world country, where there are more people with better education and opportunities to study medicine. We are paying a premium for 1st world like healthcare (or something trying to resemble it) in a dusty little country at the tip of a massive continent where every effort is made to circumvent the efforts of organisations such as Discovery.

Well they keep adding extortion like increases each year. If I wasn’t forced by my company to be subjected to this evil theft of the middle class then I certainly would not be a member!

Good luck finding value in any of the other schemes out there

Discovery = ripoff

From huge profits of a medical scheme came an Insurance company and now a bank….or am I missing something here.

As stated in previous NHI articles, these guys (fat cat directors and management at Discovery) think what they offer is reasonable next to their packages and do not get it.

This will be their downfall. Their business model needs to “slimmed down”.

How do one start a medical aid company, i mean if i can make the monthly premies very low i would still make money?
Look at the existing companies how much they make.who wanna join? Lol

The Discovery building is so beautiful, it even looks better than the Bidvest Bank building… Who pays for it?…. You suckers!

Who would like to pay for it? You really haven’t thought this through.

Yup that’s what I mean in my comment above. In their minds this business model of high end business properties, business class or first class flights to London, an army of executives all earning huge salaries, bonuses, benefits is all just normal and justified. If questioned about this the argument would be that the “costs” are negligible in the overall structure blah, blah, blah and probably “hard working” will be thrown in for good measure.

Maybe a bit of spin will be thrown in by mentioning how absolutely innovative Vitality is and how it is changing the world.

In my mind “their story” (started in a garage, worked 24 hours a day etc..) is wearing thin and if they continue as they are doing it will eventually backfire. Although not exactly the same thing, the feeling is one of recent fallen angels on the stock exchange.

How is this different from any other blue chip company?

Discovery does not benefit by rejecting anyone’s claim. The fund belongs to the members and is administered by Discovery, hence the higher the claims the higher the premiums. Discovery makes its money through an administration percentage on the premium – probably too high given its economies of scale. Obviously the higher the premium, the higher the admin fee, but given this article its fees per member must be on the wane. Whether Discovery does enough to use its dominant purchasing power to influence costs is debatable, but it is the providers like hospitals and drug companies (and some dishonest doctors) which sit at the core of medical treatment inflation, not the medical aids.

The medical aids blame the hospitals. The hospitals blame the doctors and drug companies. The doctors blame the medical aids. And so we go around and around on the merry go round while Joe Public is being fleeced. I understand. It is nobody’s fault. Just pay your ever increasing premium and shut up or die. Well, guess what. The bubble will eventually burst, and when it does, I will enjoy the collapse thoroughly. Can’t wait.

Seems like you are really looking forward to the service you will receive at the NHI. Good luck! Be careful what you wish for.

I have had 2 instances in the last 10 years that changed my perspective on medical aid, particularly the higher plans. First I was in a car accident, Discovery paid zero and they emptied my MSA to pay for the ER visit. Second was the birth of my child. If I had started saving the difference between Classic Saver and an Essential hospital plan for 9 months I would have come out ahead. 200% medical aid rates vs 100% medical aid rates was about R3000 on a R22000 total bill or about one and a half months premiums. What a joke. Then they have the unmitigated gall to offer ‘gap cover’.

So what are you paying for with these higher plans? They don’t seem to pay out for common unforeseen medical emergencies or common foreseen medical procedures.

If Discovery used your medical savings account to pay for emergency medical treatment (treatment that needed to be delivered there and then to save life or limb), then they broke the law as emergencies must be fully paid (with no co-payment whatsoever). It is prohibited to apply MSA funds against such claims; the risk benefit must be used. In a true emergency, the issue of x% of medical aid rates is irrelevant; the scheme must pay in full by law. This doesn’t mean that all treatment delivered in an emergency centre is “emergency” treatment. If you go to the ER on a Sunday because your GP is closed and you need antibiotics for sinusitis, this is unlikely to be treated as a genuine emergency. If, however, you are seriously injured in a car accident or suffer a heart attack or stroke, for instance, they must pay in full no matter where you are treated, or by which doctor, or at what rate. Unfortunately, one often has to fight as the medical schemes’ often try to wiggle off the hook on prescribed minimum benefit obligations, which is disgraceful. Their argument is that they have to, as doctors abuse the system to improve their charge-out rates and recoveries as they know that if they code a claim as PMB, they will often be paid directly and in full, rather than having to chase the patient for payment. They also rightly point out that some unscrupulous doctors abuse the PMB system to grossly over-charge and there is little a medical scheme can do except approach the HPCSA, who are in total disarray.

That’s the next part of my criticism of the medical aids. They have these fancy loyalty (money skimming) scheme as ‘preventative’ measures. But in the real world they won’t promote preventative measures. As described above, best to be ignorant and ignore symptoms then when it’s finally a life threatening emergency you get the good medicine for free.

Rational conclusion is that he is lying.

People in SA go to the hospital for fun and then moan about the queues and when their claims are rejected.

@Anything, yup. If this was such a serious emergency as he makes it out to be he would surely have been admitted and it would have been covered by in-hospital and not MSA. A load of bovine excrement

@Anything; @DieOom. You both have obviously never been in a sufficiently traumatic car accident. When you need to be cut out of the vehicle while unconscious it’s not up to you to ‘choose’ to go to the hospital for ‘fun’. But when the ER clears you for spinal injuries and treat your concussion along with any other injuries they don’t need to admit you.

But belief aside you have missed the point entirely. Even a minor car accident requiring an ER visit can cause long term injuries that can be a real problem if not detected. It is both the most likely and highest physical trauma any member of the public risks daily. Discovery does nothing to assist in even the most basic precautionary measures.

@Gazza – I was involved in a very traumatic mugging and suffered some proper injuries. Had to go to ER also with no choice in the matter, was admitted, spent 2 stints in theater and Discovery paid for everything without gap cover. So no, I still fail to see your point.

@DieOom. ‘Was admitted’. I think your misunderstanding and the point is clear now.

Adrian Gore is an actuary who decided long ago to use medical aid subscriptions as a source of income to fund his grandiose schemes to be an international banker.

QED

What would you like him to do with his money?

It’s not HIS money…

Lol really? Strange, the medical aid portion is non profit. You should tell the police he stole the admin fees of the millions of people who can leave his schemes any time they want.

Pathetic entitled South Africans wanting other people’s money.

I read a lot of complaints, but no alternatives. Should you rather self insure? Alternative health provider? No MSA makes no difference overall just who is holding the funds. Gap cover is limited. Looking for a high deductible plan, suggestions?

It is all but impossible to self-insure for catastrophic health risks. The costs are potentially uncapped. Buying a good hospital plan, which has to cover PMBs, like all emergencies, all treatable cancers, etc is actually a means of self-insuring the affordable aspects of care. You are then shouldering the risks of day-to-day preventative care, dentistry, etc yourself and offloading the big risks to the scheme. You could also buy critical illness cover, I suppose, but that tends to be expensive because so many people claim on it and there’s an adverse selection issue as to why buys it. If you do downgrade to a hospital plan only and shoulder the rest of the risk yourself, make sure you understand what is covered and where. Understand which hospitals/ doctors are in the scheme’s network for your option and remember that PMB treatment is only required to be funded at the level prevailing in state hospitals. So, not necessarily the latest drugs or procedures…our system is hugely and unnecessarily complex.

Warning sarcasm. Sounds like I need to move to a developed market then where I get to pay taxes that are way more than my monthly medical aid premiums in SA, so that by the time Im old and need expensive care Ill be just in time for the EU to bankrupt and unable to pay.

I guess the best insurance is still to look after my own health as much as possible.

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