The number of Discovery Health Medical Scheme members leaving the scheme’s top-end medical aid plans accelerated in 2020, from levels seen in 2019.
This is completely counter-intuitive given the Covid-19 pandemic.
However, various lockdowns have decimated certain sectors, with many small businesses failing and many hundreds of thousands of jobs lost. Emigration would’ve added additional pressure. This has seen the overall number of members (and beneficiaries) on the scheme decline by 2% across 2020.
The higher-end plans are leading the decline.
In 2020, the Executive, Comprehensive and Priority plans lost 22 616 members and nearly 55 000 beneficiaries, which equates to a decline of 9.4%. This compares to the 7% drop in 2019. Prior to this, these plans were losing around 5-6% of members a year. In the last five years, these plans have lost 29% of their members.
The biggest of the plans in this segment – Classic Comprehensive – has lost 32% of its members since 2015.
DHMS says “at a net principal membership decline of 14 452 [2019: 11 628], the Comprehensive series of plans experienced the largest reduction”.
|Members 2020||Members 2019||Change|
|Executive||8 237||9 208||-11%|
|Classic Comprehensive (incl Zero MSA)||111 632||124 221||-11%|
|Essential Comprehensive||12 738||14 133||-10%|
|Classic Smart Comprehensive||467||935||-50%|
|Classic Priority||78 484||84 204||-7%|
|Essential Priority||5 203||5 741||-9%|
|Classic Saver||308 970||309 501||0%|
|Essential Saver||141 708||137 403||3%|
|Coastal Saver||172 053||180 347||-5%|
|Classic Core||48 210||49 266||-2%|
|Essential Core||49 036||44 796||9%|
|Coastal Core||76 359||78 975||-3%|
|Classic Smart||47 602||39 160||22%|
|Essential Smart||38 854||30 784||26%|
|KeyCare Access/Start||6 151||6 620||-7%|
|KeyCare Core||15 950||14 819||8%|
|KeyCare Plus||208 859||221 607||-6%|
|Total||1 330 513||1 351 720||-2%|
Source: DHMS annual report, Council for Medical Schemes annual report
Half the base by beneficiaries (49.6%) is now on Saver plans (Classic Saver, Essential Saver, Coastal Saver, Classic Delta Saver or Essential Delta Saver).
By members, 47% or 623 000 are on Saver plans. There was a 1% decline in the number of members on these plans last year, following a 2% increase in 2019.
Membership on the Core plans was almost exactly flat between 2019 and 2020.
Only five plans showed growth
Only five plans across the scheme showed any growth in members last year: Essential Saver, Essential Core, Essential Smart, Classic Smart and KeyCare Core.
The two Smart plans added members at a similar growth rate to 2019. DHMS says “the most significant net membership growth was recorded in mid- to low-tier options, where the Smart series recorded net membership growth of 16 512 [2019: 17 028]”. Growth last year was 24% for the two Smart plans.
Classic Smart is now about the size of the Classic Core plan in terms of members, which is astonishing given it was only launched in 2016.
Discovery says Smart is 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”. These plans have no medical savings accounts, and private hospital cover is across a network of hospitals only (excluding emergencies).
KeyCare Core, the middle option of the three income-linked lower-end plans, saw an 8% increase in members, versus declines of 7% and 6% for the entry-level (Start) and higher-end (Plus) KeyCare plans, respectively. This movement is likely due to the pay cuts that many employees were forced to take.
Movement within the scheme
It must be noted that while on a net basis, DHMS lost 21 207 members in the year, there would’ve been a fair amount of movement within the scheme.
Movement within the scheme includes existing members upgrading or downgrading, as well as new members joining.
Some members would’ve been forced to cancel medical aid completely due to financial circumstances, some may have emigrated, while others would’ve died.
DHMS says “as a consequence of the Covid-19 pandemic, the scheme experienced a sharp reduction in utilisation, with deferral of healthcare resulting in 76.5%3 of contributions being used to fund claims for members’ direct benefit”.
“The remainder of the funds are used to build reserves and support and benefit members in areas such as innovation, managed care, administration, financial advisers and the daily operations of the scheme.”
Like many schemes, it ended with a surplus. At the end of 2020, it had a net surplus of R9 billion (2019: R1.56 billion).
It is the largest open medical scheme in the country, with 57% market share (excluding restricted schemes) as at September 30, 2020.