Members with chronic conditions claim four times more than healthy members. Picture: 123RF/GINA SANDERS
Members with chronic conditions claim four times more than healthy members. Picture: 123RF/GINA SANDERS

Discovery Health Medical Scheme (DHMS) has announced a weighted average annual contribution increase of 9.5% for 2020.

The health insurer said on Monday the 2020 contribution increases for each of its plans reflects the underlying medical inflation for Discovery Health Medical Scheme, with adjustment for plan-specific experience where required.

The contributions for members of the Priority, Saver, Smart, Core and KeyCare plans will increase by 8.9%, while the contributions for members of Coastal plans will increase by 9.9%, reflecting the higher claims inflation on these plans.

The contributions for members of the Executive, Comprehensive and lowest income band of KeyCare Plus will increase by 10.9%, reflecting the significant differences in claims inflation on these plans when compared with the rest of the Discovery Health Medical Scheme plans, the company said.

Increases in the cost of healthcare claims can be attributed mainly to more members needing to use healthcare services, and members making use of these services more frequently, DHMS says.

Dr Jonathan Broomberg, CEO of Discovery Health, provided examples of these increases, citing higher chronic-related claims as a significant contributor in the demand for healthcare and demand-side inflation.

“Claims data for DHMS indicate that the incidence of chronic conditions has increased by 48% over the past 10 years due to the impact of lifestyle diseases on the medical scheme population in general. Members with chronic conditions claim four times more than healthy members, and are more likely to require hospital admissions related to their condition, which adds to the cost of medical scheme claims,” says Dr Broomberg.

He says medical inflation is the year-on-year increase in the cost of healthcare claims and is a critical consideration for medical schemes. “Increases in the annual cost and number of claims have a significant impact on a medical scheme’s ability to provide affordable cover for healthcare services on an ongoing and sustainable basis.”

Discovery Health estimates total medical inflation for 2019 at between 10.5% and 12.5%, with the variance due to utilisation trends on the different health plan options.

Contribution increases for the different DHMS plans. Source: DHMS
Contribution increases for the different DHMS plans. Source: DHMS

However, risk management by Discovery Health and the ongoing positive impact of Vitality on engaged members’ health, reduce medical inflation by 1.6%, resulting in plan-specific contribution increases between 8.9% and 10.9%.

According to DHMS market expectations are for medical scheme contribution increases of between 10% and 12% across the industry.

Discovery Health also announced increases in Gap Cover premiums by 9.9% for members on Discovery Health Medical Scheme Essential and Coastal plans, and by 8.9% for members on Executive or Classic plans.

It also removed for 2020 the 24-month gap application waiting period for members on Essential and Coastal plans and said they may apply for Discovery Gap Cover at any time. Members with Discovery Gap Cover who downgrade to an Essential or Coastal plan may continue their gap cover policy, but underwriting will apply to any new medical conditions that you, he policyholder or any of your dependents have developed since the gap policy’s inception date.

Dr Nozipho Sangweni, principal officer of DHMS, says the average increase for 2020 enables the scheme to maintain and enhance benefits, while allowing for the increases in the demand for existing benefits, and the increases in the cost of those benefits.

The health insurer said its Gap Cover is subject to a regulated overall annual benefit limit of R160,000 per person per year.

Discovery Gap Cover is a short-term insurance policy, underwritten by Discovery Insure and not a medical scheme.

Meanwhile, Discovery today also announced significant enhancements to its Discovery Primary Care product range, which offers employers affordable access to private healthcare outside medical schemes for their employees.

In 2020, employees will have new benefits allowing them to use pharmacy-based primary healthcare clinics, which will increase the access to healthcare, and create affordable price points for employers.

Discovery also announced household employers will be able to buy Discovery Primary Care for their household employees. Less than 1% of household employees are covered by private health insurance, and Discovery Primary Care now creates the opportunity to expand this cover significantly.