South Africa’s National Health Insurance (NHI) – What it Means and Will it Work?

As of June 2023, South Africa’s National Assembly has approved the highly debated National Health Bill. Parliament states that the “objective of the NHI bill is to provide universal access to quality health care for all South Africans as enshrined in the Constitution” 

 

The bill will cover South Africans of all races rich or poor and legal long-term residents.There will be one pool of healthcare funding for private and public healthcare providers alike. The cost of our healthcare system, which is currently the most expensive in the world, will be reduced. When people visit healthcare facilities, there will be no fees charged because the NHI fund will cover the costs of people’s medical care in the same way that medical aids do for their members. NHI will narrow the gap between the rich and poor in terms of standards of healthcare. South Africans will no longer be required to contribute directly to a medical health scheme to get quality health care. It further states that the NHI will be funded through general taxes, contributions from persons earning above a set amount and monthly contributions from employees to the fund. 

 

The bill goes on to state that medical aid schemes, which up until now have been the main way in which South Africans have been able to access private healthcare, will not be replaced. Medical Aid members will be free to continue to use their medical aid schemes should they wish to. However, once the NHI is fully implemented the role of these schemes will change. 

 

Nicholas Crisp, the NHI deputy director-general, says that in the first year of NHI implementation, South Africans can expect ‘nothing to change’ in terms of their healthcare. He states that the real change will take decades. However, within the first five years of the bill becoming law many of the medical aid schemes will cease to exist and the remaining ones will all offer very similar packages. Crisp states that these packages will set the groundwork for the basic package that the NHI will offer. 

 

The bill is facing serious backlash with Business Leadership’s CEO, Busisiwe Mavuso saying to 702’s Bruce Whitfield that its proposal from the NHI is impossible to fund or implement and “as it stands it is going to leave all South Africans worse off’. Mavuso goes on to say that it is a ‘vote-earning fantasy’ and that the government is ignoring the fact that the system will collapse. 

 

The Bill is seen as a ‘get-out-of-jail’ card for the African National Congress (ANC), whose own pollsters are predicting that the party may lose its overall majority of the popular vote for the first time since the onset of South Africa’s democracy in 1994. The main question on everyone’s mind is where the money for this system is coming from. It is clear that the proposed system of NHI bears similar ambitions to Britain’s National Health Service (NHS), with both hosting political and fear factors at their core. Further, the NHS was also launched at a time of political turmoil when it was introduced in 1946 when the ruins left by World War II meant that a universal health service was needed for all citizens and permanent residents regardless of wealth and status. There is also the issue that the NHS is largely funded by taxpayer money and the NHI is proposed to be funded in a similar manner.

 

The fear that South Africa’s NHI is not feasible is not a gross understatement of South Africa’s ability but is rather depictive of the fact that the United Kingdom’s NHS is ‘a system of crisis’, with many questioning if the system will ever be able to reach its hundred-year mark. The major reason behind this is that the NHS is severely underfunded compared to its fellow G7 countries. South Africa and its proposed bill need to consider that the NHI can never be a bottomless pit of taxpayer money as the NHS has been. As an IOL article states, “If a sustainable funding model bereft of punishing especially middle-class taxpayers is not sorted out at source, then the NHI may be in danger of a stillbirth”.

 

While the importance of universal health for all is important and no one that resides in South Africa should receive anything less than equal access to quality healthcare, there is still a lot more clarity needed on the funding for such an expensive model. We can not discredit the contribution, infrastructure and world class expertise the private healthcare sector has developed. Private Healthcare would play an important role in delivering the quality care needed for all in South Africa and could work collectively to continue driving world class services to all and at the same time retaining the expertise we have and need in this country. 

 

From the desk of Westley Van Rooijen, Head of Healthcare: RSA

Facebook
Twitter
LinkedIn
Telegram
WhatsApp
Email
Shape
Shape

Money Matters – 12 June 2024

Guy Foster, Chief Strategist, discusses the prospect of interest rate cuts. Plus, Janet Mui, Head of Market Analysis, analyses fresh U.S. jobs data. Another week

Money Matters – 4 June 2024

Guy Foster, Chief Strategist, discusses the potential impact of Donald Trump’s conviction on the upcoming U.S. election. Plus, Janet Mui, Head of Market Analysis, discusses

Money Matters – 22 May 2024

Guy Foster, Chief Strategist, discusses the end of the first quarter earnings season and new developments in the Middle East. Plus, Janet Mui, Head of