Discovery announces price hikes for 2024 – here’s how much more you’ll be paying

Discovery Health Medical Scheme (DHMS) has announced the annual increases in member contributions for 2024, with a weighted average increase in gross contributions coming out to 7.5%.

The changes take effect from 1 January 2024.

“While the long-term sustainability of DHMS is paramount, we remain extremely sensitive to the economic environment and affordability pressures that Scheme members are currently facing,” Dr Ryan Noach, CEO of Discovery Health.

“We are keenly aware of the far-reaching impacts of increasing inflation, high-interest rates and low GDP growth on households and businesses in our country. With this in mind, we strive to maximise value for members of the Scheme whilst maintaining the long-term sustainability of the medical Scheme.”

The Council for Medical Schemes (CMS) recommended that medical aids in the country limit their price hikes in 2024 to 5%, plus a reasonable utilisation estimate of 3.2% to 3.8% – taking the potential increase closer to 8.5%.

Thus, the average increase falls below the CMS’s recommendations. However, this does not apply to all schemes – with some seeing increases reaching 12.9%.

Reasons for the increase

Healthcare claims increase with medical inflation yearly, which is affected by healthcare tariffs and changes in healthcare consumption.

In most countries, medical inflation runs at a premium to headline inflation and is between 3% to 4% higher.

However, in 2024, healthcare utilisation has been affected by additional adverse selection risk due to higher interest rates and the “steady state” of Covid-19 treatment since the end of the pandemic emergency phase.

“Challenging economic climates are typically represented by higher interest rates and lower disposable income for households,” Noach said.

“Our longitudinal data show a strong correlation between interest rates and adverse selection in medical insurance, typified by young healthy members on the margin of affordability prioritising other living expenses over the medical insurance contributions.”

“To further clarify, during times of financial strain, members who have an immediate need for healthcare prioritise their medical scheme membership. Healthier members facing the same financial strain choose to prioritise other necessities, while those outside medical schemes typically remain uncovered and do not buy cover.”

Moreover, Covid-19 is now in a steady state and is adding to the global disease burden.

“The projected costs of Covid-19 to the Scheme are estimated at R700 million for 2023 to fund Covid-related diagnostic testing and treatment, including in-hospital care. This year, the Scheme has so far funded 3,500 hospital admissions for members.”

However, ongoing risk management initiatives, the benefits shared through Vitality, and the deflationary effect of non-healthcare related are helping to reduce medical inflation over the period.

Changes

Despite a weighted average increase of 7.5% in gross contributions from 1 January 2024, contributions range from 3% to 12.9% increases.

“These 2024 increases for DHMS members, off a very strong current performance and market position, will ensure that contributions keep pace with medical inflation while maintaining value and affordability for members of the Scheme,” the group said.

The price increase can be found below:

• Executive: 12.9%
• Comprehensive (excluding Classic Smart Comprehensive): 11.9%
• Priority: 9.9%
• Classic Saver (Delta and non Delta): 3%*
• Essential Saver (Delta and non Delta): 3.8%*
• Coastal Saver: 6.3%*
• Core: 9.9%
• Coastal Core: 12.9%
• Smart: 8.9%
• KeyCare Plus: 10.9%
• KeyCare (excluding KeyCare Plus): 9.9%

The table below outlines the prices for a main member (Discovery provided the official prices since publication):

*The increases for the Saver options above are net of the changes in the Medical Savings Account (MSA) allocations for 2024, which are as follows:

1. Classic Saver and Classic Delta Saver: 20% allocation to MSA
2. Coastal Saver: 15% allocation to MSA
3. Essential Saver and Essential Delta Saver: 10% allocation to MSA

• The Classic Smart Comprehensive has been redesigned for 2024.
• The Classic Delta Comprehensive, Essential Comprehensive and Essential Delta Comprehensive benefit options will be consolidated into the Classic Comprehensive and Classic Smart Comprehensive benefit options in 2024.

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