Discovery medical aid price changes

Medical aid scheme Discovery Health Medical Scheme is sending out contribution update letters to members, indicating how much more they will pay from 1 October 2022.

Coming into 2022, DHMS opted for a deferred price increase for the year, offering members a 0% increase for the first four months of 2022 on all health plans.

In February 2022, the group said that the claims and investment experience for Discovery Health Medical Scheme were better than anticipated, allowing the scheme to defer the 2022 contribution increase by an additional five months from 1 May 2022 to 1 October 2022.

From October 2022, however, contributions will increase by 7.9% across schemes to ensure that prices are on par with future medical inflation, it said. Health plan benefits will remain the same until the end of the year, it said.

Members wishing to change plans before the increases take effect must do so before 30 September 2022.

These are the prices from 1 October 2022 (main member):

Proposed changes for 2023

At the start of August, the Council for Medical Schemes (CMS) recommended that increases to medical aid contributions for 2023 stay at or below inflation (5.7%).

The association said that in the context of the current economic climate – characterised by surging inflation and rising interest rates – above inflationary contribution, increases are simply unaffordable for most members of medical schemes. Medical schemes often increase prices by between 3% and 4% above the recommendations, tracking medical inflation.

The recommended 5.7% cap follows a 4.2% recommendation for 2022.

To estimate price increases in the health sector, the CMS relies on the consumer price index (CPI), as South Africa does not have an official medical price index, it said.

According to the latest inflation forecast of the SARB, as outlined in the July Monetary Policy Statement (MPC), headline inflation is expected to average 5.7% in 2023 before moderating to 4.7% in 2024.

“While the CMS encourages the industry to implement contribution increases that are affordable to members, CMS is also cognisant that due to unique industry-specific cost-push factors such as the impact of the weaker rand exchange rate, the burden of diseases, etc., some schemes may require contribution increases above inflation,” said the CMS.

The CMS requires schemes to approach the council for approval. If an increase greater than 5.7% is proposed by a scheme, then the council will need to be provided with adequate reasoning as to why.

The council stated that all pricing models for the 2023 benefit year must be data-dependent and subject to independent actuarial evaluation.

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