Discovery Health needs 280k new members a year just to stand still

That's more than the total number of members of SA's third largest medical aid. Discovery Health Medical Scheme (DHMS), which is the largest in the country by some margin, needs to add more than 280 000 new members each year just to remain at current levels. Speaking at the recent DHMS AGM, Discovery Health CEO Dr Ron Whelan said it needs to “bring in somewhere around 280 000 to 290 000 lives into the scheme” to sustain it on an annual basis. At the end of December 2025, DHMS had 1.368 million principal members and 2.725 million beneficiaries. According to Council for Medical Schemes data (for the year ended December 2024), DHMS has 57.7% market share across open schemes. It grew its (net) membership base by 0.66% in 2025, but the number of beneficiaries (net) declined by 0.37% in the year. Whelan admits there is “quite significant churn across the market”. “Members leave the scheme for a variety of reasons. They may be changing jobs, they may be changing employers, their family structures may change, they may leave just to come back,” he said. Added to this would be factors such as mortality and emigration, which would negatively impact membership numbers. Cost of growth DHMS added 290 000 new members in 2025 which, when put into perspective, is greater than the total number of lives covered by the third-largest open scheme in South Africa, Momentum (Bonitas, the second biggest, has membership of 731 000). The 280 000 to 290 000 annual hurdle rate is thus quite steep. Anything above this number begins to grow the scheme. The group spends R2.3 billion on distribution and marketing each year because DHMS, in particular, is at the scale that it almost has to, in order to prevent the scheme from shrinking. Over the past decade, the number of lives covered across open schemes in the market is down 3%, with the only growth coming from restricted schemes. Building the brand Whelan said Discovery uses its “army of advisors” to support “the ongoing growth and sustainability of the scheme”. This footprint of more than 7 500 comprises independent financial advisors (5 500), those tied to Discovery (1 300), its direct platform internally (Discovery Connect, with 500) and corporate or employer advisors (600). Of the R2.3 billion, Discovery Health and the Discovery Group invest over R1.8 billion “in sustaining this engine to the benefit of DHMS”. From a marketing perspective, it spends in excess of R500 million a year, including through what it terms “strategic sponsorships”. “If you’re an F1 fan, you’ll see the Discovery Health Medical Scheme promoted through F1. If you’re a Premier League fan, you’ll see Discovery Health Medical Scheme promoted to you through the various Premier League sponsorships,” says Whelan. “This is critical for sustaining that brand presence, sustaining that brand relevance, and most importantly, driving scheme growth.” It also uses on-site presence at corporates to keep members at its more than 7 200 employer groups engaged. “We do 3 500 employer wellness days on an annual basis,” says Whelan. “On average, we have 15 to 20 wellness days at an employer site. These are Discovery Health employees who are promoting the Discovery Health Medical Scheme across employer sites. They’re doing wellness checks in support of the scheme. “They’re promoting the scheme’s brand, an incredibly powerful force.” Ageing membership The scheme’s average age at the end of 2025 was 38.15 years, around half a year older than the 37.56 at the end of 2024. The structural problem being faced by all schemes (DHMS included) is an ageing membership base as they struggle to add younger members in a largely stagnant job market (and economy). To address this, Discovery launched Active Smart in 2025, which is specifically designed for those entering the job market who tend to be younger and healthier. By the end of the year, Active Smart had more than 23 000 members and nearly 31 000 beneficiaries, proving that a gap in the market clearly exists for a plan with a monthly contribution of R1 350. This is also the only Discovery Health plan that saw zero increase in contributions in 2026. According to DHMS, across the scheme on average, new joiners are 10 years younger than existing beneficiaries. This article was republished from Moneyweb. Read the original here.