Discovery Health said the main reasons for members leaving their high-end medical aid plans were changes in employment and not emigration.
Moneyweb recently reported that the emigration of rich South Africans could explain the decline in the number of members and beneficiaries on Discovery Health’s highest-end medical aid plans.
It highlighted that Discovery Health has seen stark declines in the number of members and beneficiaries on its priciest plans.
While emigration impacted the membership of Discovery Health’s Executive, Classic Comprehensive, and Essential Comprehensive plans, it is not the primary reason for the decline.
Deon Kotze, chief product officer at Discovery Health, confirmed that the number of existing members leaving these plans exceeded the number of new members joining.
The main reasons for members leaving these plans were changes in employment, which prompted a review of their medical scheme membership, or a move to more affordable plans.
“It is inappropriate to measure emigration of wealth based on the decline in membership of the Executive and Comprehensive options of the Discovery Health Medical Scheme (DHMS),” he said.
He explained that emigration is cited as the key reason for withdrawal across all DHMS plans, and this is not limited to the Executive and Comprehensive plans.
Furthermore, the Executive and Comprehensive plans are available to all members, regardless of income.
“These plans are taken up by people with specific, often more demanding healthcare needs that are met by the more comprehensive benefits offered by these options,” he said.
Kotze said membership in the more comprehensive options is, therefore, not an appropriate indicator of wealth.
It is important to consider the membership of the Executive and Comprehensive plans in the context of the overall performance of DHMS.
The most recent data for DHMS and the open medical scheme industry indicate the following.
In 2022, DHMS continued to experience growth in excess of that seen prior to the COVID-19 pandemic, with higher levels of new business and lower levels of withdrawals.
Between December 2022 and January 2023
- 97.15% of members did not change their plans (Sept to Oct 2022: 98.68%)
- 1.5% of members upgraded their plans (Sept to Oct 2022: 0.75%)
- 1.35% of members downgraded their plans (Sept to Oct 2022: 0.57%)
Although the proportion of members on top-tier DHMS plans has reduced in 2022, the overall plan distribution of DHMS remains very stable, without any impact on the operating performance of the Scheme.