Discovery Health Medical Scheme

Discovery Health Medical Scheme Dear Employer Discovery Health Medical Scheme launched its 2017 product offering on 20 September 2016. Here s an overview of the most important changes, effective 1 January 2017. We will present a detailed analysis at the Alexander Forbes Health strategic employer launch and the year-end planning meetings. Contribution increases for 2017 The increase for all plans will range between 9.9% and 14.9%. The weighted average headline increase is 10.2%. To establish the increase, Discovery Health Medical Scheme considered the following: Plans Tariff Utilisation Increases for 2017 Plans excluding Comprehensive, Executive and Coastal Comprehensive and Executive. These plans have a higher increase (2%) due to demand side pressure. CPI 3.5% 9.9% 5.5% 11.9% Coastal Saver and Coastal Core Demographic changes and hospital utilisation increases require a 5% contribution correction *Coastal Saver s Medical Savings Account has reduced from 25% to 20% of the monthly contribution. Threshold levels 8.5% Coastal Saver 7.8%* Coastal Core 14.9% Threshold levels have increased between 9.05% and 12.60% across Executive, Comprehensive and Priority Plans. Plan Principal Adult Child member Executive R16 600 R16 600 R3 150 Comprehensive R15 500 R15 500 R2 950 Priority R13 150 R 9 850 R4 300 Priority Above Threshold Limit R11 150 R 7 950 R3 850

Summary of benefit changes for 2017 Limit changes 2017 Benefit limits, copayments and deductibles Increased by 9.9% Oncology No change MRI/CT scan copayments Increased by 5.45% External medical items limit No change Spinal devices limit No Change Internal prosthesis limit Increased by surgical inflation Hospital benefits The Priority plan deductibles range from R2 800 to R13 850. Deductibles 2016 2017 % increase Conservative back and neck treatment, myringotomy (grommets), tonsillectomy, adenoidectomy R2 550 R2 800 9.80% Colonoscopy, proctoscopy, sigmoidoscopy, cystoscopy and gastroscopy R3 300 R3 600 9.09% Arthroscopy, functional nasal procedures, hysterectomy (except for preoperatively diagnosed cancer), endometrial ablation, laparoscopy, hysteroscopy R6 150 R6 750 9.76% Reflux surgery, spinal (back and neck) surgery and joint replacements R12 600 R13 850 9.92% The Delta plans deductible increases from R6 450 to R7 100, a 10.08% increase. The Classic Smart Plan deductible increases from R7 500 to R8 200, an 9.33% increase. The deductibles for in-hospital dentistry will increase as follows: Category of members Hospital % increase Day clinic % increase 2016 2017 2016 2017 Members younger than 13 R1 850 R2 050 10.81% R850 R 930 9.41% Members older than 13 R4 800 R5 250 9.34% R3 100 R3 400 9.68% KeyCare The income band structure of KeyCare Plus has been adjusted for 2017: Income bands 2016 2017 R0 R290 N/A Student option discontinued for 2017 R291 R7 550 R0 R8 100 R7 551 R10 750 R8 101 R11 550 Increased by 7.4%. R10 751+ R11 551+

NEW BENEFITS FOR 2017 The Smart Plan Range Classic Smart Plan The existing Smart Plan has been renamed Classic Smart Plan and will include the following enhancements: Broader hospital and GP Network. Extended acute medicine benefit. One dental check-up a year with a R100 co-payment. One eye test a year at any Mellins optometrist with a R50 co-payment. Sports Injury Benefit covering basic X-rays, two specialist visits and a total of four visits to a physiotherapist, biokineticist or chiropractor. Must be referred by a Smart Network GP with a R100 co-payment for each visit. Essential Smart Plan This new plan has been introduced into the Smart Range and will provide members with: 100% cover at hospitals in the Smart Plan network. R8 200 co-payment when using a non Smart Network hospital. Full cover for chronic medication from the chronic disease list as per the formulary list when using Medxpress, MedXpress partner pharmacies, Clicks or Dis-chem. Screening and prevention benefits. Unlimited GP consultations through the Smart Plan network. A R100 co-payment applies for each visit. Members also have cover for video call consultations. One dental check up a year with a R150 co-payment. One eye test a year at any Mellins optometrist with a R100 co-payment. Changes to Smart Hospital Network Ethekwini Hospital and Heart Centre KwaZulu Natal has been removed. The following has been added to the network: Mediclinic Nelspruit Mpumalanga NetCare FernCrest North West Life Beacon Bay Eastern Cape Life Claremont Western Cape Life Kingsbury Western Cape Life Wilgers Gauteng Diabetes Care This programme is designed to achieve well-coordinated care for members with diabetes who are registered on the chronic illness benefit. The four key elements are: Access to the Premier Plus GP network to coordinate care. The Premier Plus GP network is the Designated Service Provider (DSP) for all plans except the Executive and Comprehensive plans. Additional funding for visits to a biokineticist and dietician. Monthly progress dashboard on the web, member app and email.

Centres of Excellence Two networks have been introduced for major joint replacement and specialised in-hospital psychiatry. Members using the major joint network will have full cover. A 20% co-payment will be charged for admissions outside the network with the exception of the KeyCare and Essential Smart plan where joint replacements are exclusion. Members using the psychiatry network will have cover at 100% of the Discovery Health Medical Scheme rate. A 20% co-payment will be charged for admissions outside the network. Not covered on Keycare and Essential Smart Plan. KeyCare Series changes Keycare hospital network will be divided into two tiers and members will have full cover for admissions to the Full Cover Network. Hospital accounts in the Partial Cover Network (6 Hospitals) will be covered by up to 70% of the Discovery Health Medical Scheme rate. Members suffering from complex medical conditions can be enrolled in the Care Coordination Programme based on clinical entry criteria. These members will be contacted by Discovery Health Medical Scheme if they meet the entry criteria. If they do not register on the programme, a 20% co-payment will apply for all voluntary non-emergency admissions. Screening and Prevention Benefit The Screening and Prevention Benefit will be updated to provide clinically appropriate screening for all members and enhanced screening for at risk members. Members with results that are out of range for their glucose and cholesterol tests will be covered for a Lipogram and HbA1c as part of the screening process, effective 01 April 2017. For breast cancer and cervical cancer screening, the benefit has been reduced to: - One mammogram every two years - One pap smear every three years At risk members will be covered for: - One mammogram or breast MRI test a year - Once off BRCA testing - Annual pap smear External Medical Items Extender Benefit (EMI) This benefit will be enhanced to provide access to additional high end items, in excess of the EMI benefit limit, to high risk members who qualify for extended cover. Day-to-Day Extender Benefit The existing Insured Network Benefit has been renamed the Day-to-Day Extender Benefit and will include the following enhancement: Members will now need to use a Premier Plus GP for GP visits. The network has been contracted based on quality based metrics.

Chronic Illness Benefit Changes to the medicine list and chronic drug amount will apply for new members from 1 January 2017, and to existing members from July 2017. Discovery Gap Cover Discovery Insure and Discovery Life have each introduced a product for 2017. Gap Cover Discovery Insure Covers shortfalls on approved in-hospital specialist claims as well as shortfalls on approved cancer-related claims. In-hospital Specialist Gap Cover pays 1x Discovery Health Medical Scheme rate for approved in-hospital specialist claims that exceed the amount paid by the medical aid scheme. Gap Cover Extender provides unlimited cover where specialists charge more than the medical scheme rate and accumulates and pays out annually, less the plan-specific excess: - Executive and Classic R2 000 - Essential and Coastal R5 000 Oncology Benefit Extender provides cover up to R100 000 a year on shortfalls on approved cancer related claims where you experience a co-payment on your medical scheme benefits. Plan Main Member First adult and child dependants Second and subsequent adult dependants Discovery Health Medical Scheme Executive, Classic plans and their equivalents Other plans R100 R40 each R100 each R200 R80 each R200 each Discovery Supplementary Gap Cover Discovery Life Provides lump-sum payouts, premium protection and a home support benefit. The Medical Breakthrough Funder pays a tax-free lump sum of up to R500 000 on diagnosis of certain cancers and other severe illnesses. This benefit will also help fund advanced genomic sequencing of certain cancers. Comprehensive Premium Protector pays the families monthly medical scheme contributions for two years on the event of the member s death, severe illness or disability. Home Support Benefit pays members R10 000 every month for a year in the event that the member or spouse suffers a life-changing disability. The premium on this gap product is dependent on age, family size, smoking status and ranges from R65 to R1 970 per month.

Vitality benefits Vitality Active Rewards Sker-Kinekor and Mugg & Bean have been added to the Active Rewards partners. Vitality Active Rewards Shoe Booster offers up to 100% back on a pair of new running shoes. Vitality Points Members will get up to 50% of their Vitality points back in Discovery Miles every year. Members can boost their travel savings by up to 50%. Discovery Card Big concerts have partnered with Discovery Vitality. Discovery Card holders get exclusive prebooking access 48 hours before anyone else. Vitality Weight Loss Rewards Members with a Body Mass Index (BMI) and waist circumference above the recommended healthy range will be given clinically appropriate weight loss goals. They will be encouraged to follow a series of 12-week weight loss cycles over a period of 6 to 12 months, depending on the amount of weight they need to lose. Members can enjoy a cash back bonus of up to 50% of their HealthyFood spend for three months after they ve achieved their first goal. Alexander Forbes Health is available to help you and your employees make good choices in 2017 because your health matters. Yours in health Alexander Forbes Health Follow us on Twitter #AF_Health Disclaimer: While all reasonable care has been taken in compiling this communication, we have relied upon the accuracy and completeness of the information made available to us by Discovery Health Medical Scheme at their Corporate Broker Launch. Consequently we cannot accept any liability for any errors or omissions that may arise as a result of the reliance on such information. Further please note that the medical scheme changes are still subject to approval by the Council for Medical Schemes. Alexander Forbes Health will keep you informed as to further information or changes that we may become aware of. Alexander Forbes Health is a licensed financial services provider. (FSP 33471) CMS registration number ORG 3046

2017 DISCOVERY HEALTH MEDICAL SCHEME TOTAL MONTHLY CONTRIBUTIONS Series Plan Principal member Adult dependant* Child dependant* Executive Executive R 5 544 R 5 544 R 1055 Comprehensive Classic Comprehensive R 4 506 R 4 264 R 898 Classic Delta Comprehensive R 4 059 R 3 842 R 807 Classic Comprehensive Zero MSA R 3 380 R 3 199 R 674 Essential Comprehensive R 3 787 R 3 580 R 762 Essential Delta Comprehensive R 3 410 R 3 221 R 684 Priority Classic Priority R 2 986 R 2 337 R 1 187 Essential Priority R 2 551 R 2 004 R 1 017 Saver Classic Saver R 2 577 R 2 029 R 1 031 Classic Delta Saver R 2 058 R 1 623 R 826 Essential Saver R 2 047 R 1 536 R 819 Essential Delta Saver R 1 634 R 1 230 R 655 Coastal Saver R 2 007 R 1 506 R 808 Smart Classic Smart R 1 535 R 1 209 R 612 Essential Smart R1 100 R1 100 R1 100 Core Classic Core R 1 918 R 1 510 R 767 Classic Delta Core R 1 535 R 1.209 R 612 Essential Core R 1 648 R 1 234 R 661 Essential Delta Core R 1 317 R 989 R 528 Coastal Core R 1 496 R 1122 R 596 KeyCare KeyCare Plus (R0 R8 100) R 914 R 914 R 331 KeyCare Plus(R8 101 R11 550) R 1 280 R 1 280 R 358 KeyCare Plus (R11 551+) R 1 906 R 1 906 R 510 KeyCare Access (R0 R5 050) R 644 R 644 R 281 KeyCare Access (R5 051 8 100) R 859 R 859 R 309 KeyCare Access (R8 101 R11 550) R 1 241 R 1 241 R 348 KeyCare Access (R11 551+) R 1 863 R 1 863 R 503 KeyCare Core (R0 R8 100) R 731 R 731 R 190 KeyCare Core (R8 101 R11 550) R 912 R 912 R 224 KeyCare Core (R11 551+) R 1 408 R 1 408 R 318 *Contributions are charged up to a maximum of 3 children; Dependants 21 years + are considered adult dependants VITALITY & KEYFIT CONTRIBUTIONS Family Size: Single member Member with one Member with two or dependant more dependants Vitality R219 R265 R296 KeyFIT R47 R57 R71

MEDICAL SAVINGS ACCOUNT ALLOCATIONS (MSA) Principal member Adult dependant Child dependant* Series Plan Annual Monthly* Annual Monthly** Annual Monthly* Executive Executive R 16 632 R 1 386 R 16 632 R 1 386 R 3 156 R 263 Comprehensive Classic R 13 512 R 1 126 R 12 792 R 1 066 R 2 688 R 224 Classic Delta R 12 168 R 1 014 R 11 520 R 960 R 2 412 R 201 Essential R 6 816 R 568 R 6 444 R 537 R 1 368 R 114 Essential Delta R 6 132 R 511 R 5 796 R 483 R 1 224 R 102 Priority Classic R 8 904 R 742 R 7 008 R 584 R 3 552 R 296 Essential R 4 584 R 382 R 3 600 R 300 R 1 824 R 152 Saver Classic R 7 728 R 644 R 6 084 R 507 R 3 084 R 257 Classic Delta R 6 168 R 514 R 4 860 R 405 R 2 472 R 206 Essential R 3 684 R 307 R 2 760 R 230 R 1 464 R 122 Essential Delta R 2 940 R 245 R 2 208 R 184 R 1 176 R 98 Coastal R 4 812 R 401 R 3 612 R 301 R 1 932 R 161 * A maximum of three children are counted when calculating the Annual MSA allocation. *Where applicable, the monthly MSA allocation is included in the total monthly contribution. ANNUAL THRESHOLD LEVELS Plan Principal member Adult dependant Child dependant Executive R 16 600 R 16 600 R 3 150 Comprehensive R 15 500 R 15 500 R 2 950 Priority R 13 150 R 9 850 R 4 300 * A maximum of three children are counted when calculating the Annual Threshold Level ANNUAL ABOVE THRESHOLD LIMIT Plan Principal member Adult dependant Child dependant Priority R11 150 R 7 950 R 3 850 * A maximum of three children are counted when calculating the Above Threshold Limit LATE JOINER PENALTIES Please note these rates are the standard Discovery Health Medical Scheme rates and do not take into account any late joiner penalties (LJP) that may be applied to an applicant or to the adult dependant of an applicant older than age 35. Depending on the number of years they have not belonged to a registered South African medical scheme, an additional penalty (percentage of the contribution) may be added to the member's monthly contribution, as shown in the table below: Penalty bands Maximum penalty 1 4 years 0,05 contributions 5 14 years 0,25 contributions 15 24 years 0,50 contributions 25+ years 0,75 contributions The LJP is calculated as follows: A = B minus (35 + C) where: A = the number of years in the first column B = the age of the applicant at the time of application C = the number of years of creditable cover