Discovery delays medical aid contribution increases again

Discovery Health Medical Scheme (DHMS) will again delay the implementation of its annual contribution increases because of “the decline in non-Covid-19 healthcare claims seen over the course of the pandemic,” says Discovery Health CEO Dr Ryan Noach.

Annual contribution increases of 7.9% will only be implemented from May 1 next year. This follows a six-month delay in implementing the increases for this year. Discovery says this makes DHMS the only medical scheme to have deferred contribution increases twice since the onset of the pandemic. It says the contribution relief to members totals over R4 billion.

Read: How much DHMS pays Discovery to administer your medical aid

Noach says: “The deferral of the increases for 2021 and 2022 means that members will have an actual effective increase in total contributions of 2.9% in 2021 and 5.3% during 2022. At the same time, the scheme’s contributions are keeping pace with the medical inflation anticipated once Covid-19 becomes endemic in the healthcare system and avoids the need for increase ‘shocks’ at that time.”

Medical inflation breakdown

The 7.9% estimate for medical inflation in 2022 is comprised of a 4.4% increase in the cost of healthcare services (tariff inflation), a 1.5% increase in claims (utilisation changes) and 3% because of changes in the demographic profile of the medical scheme (demographic risk). Discovery says this is unaffected by Covid-19.

This totals 8.9% and will be offset by a 1% reduction in expected future claims in “benefits derived from risk management and Vitality”.

Noach says the trend of lower healthcare utilisation “has strengthened the scheme’s reserve position relative to regulated solvency requirements”.


The scheme has maintained its strong reserve position over 2021 and is projecting solvency to be well above the regulated requirements by the end of the year.

Read: Discovery: Profitable in a pandemic

“While reserve levels remain high, medical schemes must account for the return of non-Covid-19 healthcare demand once Covid-19 becomes a stable, endemic infection. Strong reserve levels are essential to manage short-term Covid-19 spikes, and the return of latent, non-Covid-19 healthcare demand.

“This is why contribution increases must be priced absolutely correctly to allow for expected future healthcare utilisation,” it says.

“Setting contributions lower than medical inflation will result in contributions falling behind claims and lead to ongoing medical scheme losses, ultimately resulting in future contribution ‘shocks’ to maintain sustainability.”

While medical scheme claims are currently depressed because of Covid-19, the trend is temporary and not reflective of underlying medical inflation.

Claims higher between waves

Discovery says the DHMS claims experience for 2021 shows that healthcare claims between Covid-19 waves are higher than pre-pandemic levels.

It says that as an example, between waves of Covid-19 infection, elective surgical admissions such as major joint replacements and cataract surgery have increased to 113% and 120% of pre-Covid-19 levels respectively.

Noach adds: “The claims experience of DHMS provides guidance on the expected future cost of healthcare claims between Covid-19 waves and once Covid-19 becomes endemic.

“The trends imply that medical inflation has persisted at a rate of 3% to 4% above consumer price inflation since 1 January 2020, and that DHMS will be well positioned with contributions at the level of anticipated claims before considering contribution increases for 2023.”

Contribution changes

Discovery has not confirmed the contributions from May onwards, but applying the 7.9% increase to current contributions provides the following estimates. Some of these may end up being R1 or R2 higher or lower.

Main member contribution 2020 2021 July 2021 Estimated contribution from May 2022
Executive Plan R7 257 R7 257 R7 688 R8 295
Classic Comprehensive R5 954 R5 954 R6 309 R6 807
Classic Delta Comprehensive R5 362 R5 362 R5 681 R6 130
Essential Comprehensive R5 003 R5 003 R5 301 R5 720
Essential Delta Comprehensive R4 507 R4 507 R4 775 R5 152
Classic Smart Comprehensive R4 327 R4 327 R4 585 R4 947
Classic Priority R3 814 R3 814 R4 041 R4 360
Essential Priority R3 278 R3 278 R3 472 R3 746
Classic Saver R3 290 R3 290 R3 485 R3 760
Classic Delta Saver R2 628 R2 628 R2 784 R3 004
Essential Saver R2 615 R2 615 R2 770 R2 989
Essential Delta Saver R2 085 R2 085 R2 209 R2 384
Coastal Saver R2 608 R2 608 R2 763 R2 981
Classic Smart R1 954 R1 954 R2 070 R2 234
Essential Smart R1 400 R1 400 R1 483 R1 600
Classic Core R2 449 R2 449 R2 594 R2 799
Classic Delta Core R1 960 R1 960 R2 076 R2 240
Essential Core R2 104 R2 104 R2 229 R2 405
Essential Delta Core R1 681 R1 681 R1 781 R1 922
Coastal Core R1 946 R1 946 R2 062 R2 225
KeyCare Plus R0-8 550 R1 207 R1 207 R1 279 R1 380
KeyCare Plus R8 551-13 800 R1 659 R1 659 R1 758 R1 897
KeyCare Plus R13 801+ R2 450 R2 450 R2 595 R2 800
KeyCare Core R0-8 550 R949 R949 R1 005 R1 084
KeyCare Core R8 551-13 800 R1 183 R1 183 R1 253 R1 352
KeyCare Core R13 801+ R1 809 R1 809 R1 916 R2 067
KeyCare Start R0-9 150 R914 R914 R968 R1 044
KeyCare Start R9 151-13 800 R1 538 R1 538 R1 629 R1 758
KeyCare Start R13 801+ R2 394 R2 394 R2 536 R2 736

Discovery says there has been a reduction in members withdrawing from the DHMS, and an increase in the number of new members joining the scheme.

As at the end of August, the scheme had grown its membership by more than 27 000 lives during 2021.

Listen to Fifi Peters’s interview with Profmed CEO Craig Comrie (or read the transcript here):