No price hike for Discovery scheme members in the first half of 2021

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Discovery Health Medical Scheme has announced 0% contribution hike for its members in the first half of 2021
Discovery Health Medical Scheme has announced 0% contribution hike for its members in the first half of 2021

Discovery Health Medical Scheme members will not have an increase to their contributions until July 2021, after the scheme said it expected a 0% increase in medical inflation for the first half of next year.

Medical inflation is used by schemes to determine what their annual increases should be.

“Each year we strive for the lowest possible contribution increase. For the first six months of 2021, DHMS (Discovery Health Medical Scheme), will deliver a contribution freeze for all scheme members across all plans, mindful of and sensitive to the financial pressures facing individuals at this time within the country’s stressed economic climate,” Dr Ryan Noach, CEO of Discovery Health said in a statement on Wednesday.

While it’s annual increase season for South Africa’s medical aids, this year appears to be playing out differently due to the Covid-19 pandemic, which has resulted in fewer patients visiting their doctors, especially for surgeries and healthcare services they could postpone. Noach said although the scheme has seen an increase in Covid-19 related demand for services, demand for care not related to Covid-19 had reduced by 20% to 40% during the pandemic.

“The net effect of this utilisation discontinuity has been to reduce the total claims received by DHMS during the period, resulting in a marked increase in scheme reserves,” he said.

Regulations require medical schemes to have 25% of their annual gross premium income in reserves to ensure that they can meet future healthcare claims. Noach said the scheme is in a strong position to meet its needs and its reserves are 20% higher than the combined reserves in all of its competitors in the open medical scheme industry.

However, he explained that the reprieve is temporary and the demand for non-pandemic healthcare will likely be back at pre-Covid levels by the middle of next year meaning that claims will also increase as pent up demand for non-urgent care gains momentum. The demand will also be driven by the availability of the Covid-19 vaccine and possible new infections.  

DHMS will announce its contribution for 2021 in the second quarter next year and projects it to be no more than 5.9% across all its plans.

“This translates to a weighted annual increase of less than 3% for all DHMS members on all plan options in 2021 and balances the need for affordability and scheme sustainability,” he said.

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