South Africa’s Health Insurance Bill (NHI) is a piece of legislation currently being implemented to achieve universal access to quality healthcare services for all South African citizens. It was signed into law in June 2023 and is now in the process of being rolled out.
The Bill aligns with Section 27 of the South African Constitution, which states that everyone has the right to access healthcare services and will therefore make healthcare a constitutional right for all South Africans. This will be achieved through a centralized fund financed by taxes and Employer contributions to ensure equitable access, efficient resource allocation, and protection against abuse by strategically purchasing services and combating unethical practices.
The National Council of Provinces (NCOP) passed the National Health Insurance (NHI) Bill to the presidency early in December 2023, which was unexpected, to say the least. This was a particularly disappointing development, given that more than 100 detailed submissions and serious constitutional and economic anxieties were voiced by multiple stakeholders, including some of the largest open medical schemes in South Africa.
The next step in the legislative process
President Cyril Ramaphosa’s pen now holds the fate of the National Health Insurance Bill. He must grapple with its constitutionality amidst expected petitions from various stakeholders. Two paths lie before him: Assenting to the Bill, which would likely trigger prolonged legal battles, or sending it back to the National Assembly for revisions. Even after revisions, a referral to the Constitutional Court for a final verdict on its constitutionality remains a possibility.
The NHI Bill has the potential to significantly improve healthcare access and outcomes for all South Africans. However, it faces several challenges, including funding limitations, concerns about administrative complexities, and resistance from private healthcare providers.
With this said, it is important to note that Universal Health Coverage is crucial and a workable NHI system is central to achieving this. A functional system can only be achieved by collaborations with the private sector.
Even if we ignore legal and constitutional roadblocks, transforming South Africa’s healthcare system in this way is a huge endeavor and will therefore not happen overnight. It will take at least ten years to fully roll out the National Health Insurance (NHI). During this time, open medical schemes will largely remain unchanged.
What will be covered?
The exact scope of services covered under the NHI is still under development, but it is proposed that the benefits package under the NHI will provide the following:
Primary and Preventative Care
- Consultations with doctors, nurses, and other healthcare professionals.
- Routine checkups and screenings for common diseases.
- Vaccinations and immunizations.
- Family planning and reproductive health services.
- Mental health services.
Chronic Disease Management
- Treatment for chronic conditions like diabetes, hypertension, and HIV/AIDS.
- Access to essential medications and medical supplies.
- Ongoing monitoring and support from healthcare professionals.
Hospitalization and Inpatient Care
- Coverage for hospital stays, surgeries, and other inpatient procedures.
- Access to specialized medical services and technologies.
- Rehabilitation and physiotherapy after hospitalization.
Essential Medical Supplies and Technologies
- Prescription medications and other essential medical supplies.
- Diagnostic tests and imaging services like X-rays and MRIs.
- Emergency medical services and ambulance transport.
Will everyone be able to access private health care and to what extent?
NHI aims to provide universal access to quality healthcare for all South Africans, regardless of their income or socio-economic status. This means that, in theory, every citizen and legal resident would be eligible to receive a defined set of essential healthcare services free at the point of care.
Is there still a place for Private Medical Schemes and other healthcare products?
Yes, there is likely to be a place for private medical schemes in the NHI framework. The exact nature of the role of private medical schemes is still under discussion and will depend on the final design of the NHI.
How will NHI be funded?
The funding of NHI has various proposed funding sources, which are still being debated. The main funding pillars are as follows:
- General taxes – A significant portion of NHI funding is expected to come from increased general taxes. This principle aims to ensure everyone contributes based on their ability to pay, promoting solidarity and equitable access.
- Employer/Employee Contributions – Similar to existing unemployment insurance contributions, employers might be required to collect and submit contributions from employees to the NHI fund. This broadens the funding base and encourages shared responsibility.
- Medical Scheme Levy Adjustments – The government is considering adjusting the medical scheme levy, a tax currently imposed on private medical scheme contributions. This could involve reducing the levy while simultaneously directing some of the revenue towards NHI.
- Other Potential Sources – Additional funding avenues being explored include sin taxes on tobacco and alcohol, voluntary pre-payment options, and potential partnerships with the private sector.
How will NHI be rolled out?
It is expected that the NHI rollout will be phased and gradual, focusing on smooth integration with existing healthcare systems. It will involve:
- Pilot testing – Selected regions will trial NHI functions, gather data, and refine procedures.
- Gradual expansion – Services will be rolled out to additional areas, based on funding, infrastructure, and logistics.
- Building on existing systems – Public healthcare infrastructure will be optimized. Potential partnerships with the private sector may occur.
- Continuous improvement – The NHI will adapt to evolving needs and feedback from stakeholders.
The National Health Insurance Bill is a crucial step towards equitable healthcare in South Africa. It represents a commitment to a future where quality healthcare is a right for all. As we progress through this decade-long transformation, the NHI Bill is a beacon of hope and a testament to the impact of collective effort and visionary leadership in creating a more inclusive healthcare system.
This information is provided by Tennant, Asinta’s employee benefits consulting Partner in South Africa. If you need support with your benefits in the country, please contact Asinta, and we will put you in touch with the local experts at Tennant.