Discovery delays dues increases to April

The Discovery Health Medical Scheme (DHMS) has announced that its members will no longer pay for their membership until April 1, 2023, instead of January 1, 2023. Yet, from January 1, 2023, they will have access to a range new and improved perks.

This is the third time the scheme has postponed annual dues increases to provide financial relief to its members.

The DHMS is once again extending the innovative strategy put in place during the first two years of Covid-19 and fueled by the resulting disruptions to the health system. The DHMS is the only South African medical scheme to have followed this approach, now for three consecutive years.

The 2023 increase will be announced in February, to ensure careful alignment with medical inflation.

Ryan Noach, Managing Director of Discovery Health, explains: “We will officially announce the exact increase in the contribution from April 2023, towards the end of February next year.

“At this time, the outlook for consumer price inflation (CPI) and healthcare utilization remains volatile. It is important that the increase in contribution accurately reflects changes in price and underlying usage for 2023.

“The eventual increase will be in line with medical inflation which is typically 3% to 4% above CPI, although members will experience an actual annual increase between CPI and CPI+2% , given the postponement.As always, DHMS aims to balance its long-term sustainability with short-term affordability for its members.

1.9 billion rand savings for this year

The postponement of the 2023 increase amounts to approximately R1.9 billion in savings for scheme members for this year, bringing total member savings to nearly R8.7 billion since 2020

“As we reflect on 2020 and 2021 and the carefully considered freeze on premium increases, it’s pleasing to note that the brilliant actuarial calculations that informed the strategy have brought our projections almost exactly in line with actual claims expense for diet,” says Noach.

“The Scheme’s reserves have strengthened against regulated solvency requirements due to the significant decline in non-Covid healthcare claims recorded during the pandemic and through 2022.

“The scheme’s excess solvency has been used to benefit members, with R6.8 billion realized in contribution savings in 2020 and 2021 through deferred increases. This has also resulted in lower effective annual contribution increases of 50 basis points to the market over these two years.

“The postponement of the 2023 dues increase generates additional savings of R1.9 billion for members in the first three months of 2023, bringing cumulative member savings (returned to members due to excess solvency) over the past three years to nearly R8.7 billion. ”