Discovery Health Faces Member Losses as KeyCare Plans Shrink

KeyCare plans lose ground

Discovery Health Medical Scheme (DHMS), South Africa’s largest private health insurer, continues to grapple with declining membership. Between June 2024 and June 2025, the scheme saw a modest 0.1% drop in total lives covered, marking a slowdown from the previous year’s 1.1% decline.

The biggest hit comes from its KeyCare series, affordable plans aimed at lower-income members. KeyCare membership fell 9% year-on-year, a worrying continuation of a trend that has seen the base lose 20% of members since June 2019. Contributions start as low as R1 184 per month, linked to members’ income, making these plans vital for affordability in South Africa’s strained healthcare landscape.

Growth driven by non-KeyCare and closed schemes

While KeyCare struggles, Discovery’s higher-income and non-KeyCare segments are holding steady. This group now represents 86% of total members, growing 1.5% year-on-year to 1.17 million members. The scheme’s overall membership growth is also buoyed by the absorption of closed schemes, such as Sasolmed, which saw an 11% rise in members after joining the Discovery base. Total lives under administration now stand at nearly 3.98 million.

Additionally, Discovery has expanded its non-scheme offeringsFlexiCare health insurance, gap cover, Healthy Company for corporates, and Vitality Health International for multinationalswhich now cover 450 000 lives. These products offer avenues for growth outside traditional medical schemes, helping Discovery maintain market presence despite stagnant core membership.

Demographic challenges and plan shifts

Many of Discovery’s core medical aid plans continue to see declines. Classic Comprehensive, one of its largest plans, lost 7% of members year-on-year, while KeyCare Plus, income-limited and popular among lower-income professionals, fell 11%. Over four years, Classic Comprehensive has shed 26% of its member base.

The average age of members is creeping up, from 32.3 in 2009 to 37.6 in 2025, creating structural challenges for risk pooling and cost management. To attract younger members, Discovery launched the Active Smart Plan in 2023, targeting young professionals with contributions starting at R1 350 per monththe most affordable in the open scheme market.

Personal Health Pathways drives engagement

Discovery’s hyper-personalised Personal Health Pathways programme has been a bright spot. Launched this year, it has seen 361 000 members (about 17% of the eligible base) engage with health and exercise actions. Chronic members account for nearly 70% of all completed activities, highlighting the programme’s effectiveness for those managing long-term conditions.

The scheme has paid out R27.2 million in rewards and R197 million in additional benefits through the Personal Health Fund, while completion rates for recommended health actions have surged nearly 400%. This focus on proactive health management is not mandatory but runs alongside Discovery’s Vitality programme, encouraging a healthier, engaged membership base.

Financial performance

Discovery’s administration business collected nearly R9.77 billion in fees for the year ended June 30, 2025. After expenses of R7.5 billion and factoring in other income, the unit posted a normalised profit of R4.2 billion, a 7% increasewith profit after tax of R2.8 billion.

Despite these financial gains, the stagnation in member growth and the decline in lower-income KeyCare plans highlight challenges for the scheme: balancing affordability, managing an ageing membership, and staying competitive in an increasingly complex South African healthcare environment.

Discovery’s struggle reflects broader trends in South Africa’s medical aid sector: economic pressures, an ageing membership base, and the difficulty of attracting younger members who may opt for lower-cost or alternative health solutions. While closed schemes and non-scheme products provide temporary growth, the ongoing decline in KeyCare membership signals structural issues that require strategic attention.

Social media reaction has been mixed, with some members expressing frustration over rising contributions and limited affordable options, while others praise the scheme’s health engagement programmes and innovation in chronic care management.

For Discovery Health, the next few years will be critical in balancing affordability, expanding younger membership, and sustaining its market-leading position in a highly competitive healthcare landscape.

{Source: Moneyweb}

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