The NHI was approved by Cabinet on 10 July 2019 and submitted to Parliament on 26 July 2019. Following consultations, the amendments by the National Assembly were passed in June 2023. President Ramaphosa signed the bill into law on 15 May 2024.

According to Business Tech on 12 August 2024, Minister Aaron Motsoaledi announced that the Department of Health will embark on roadshows and workshops to consult on NHI.

According to Mark Bechard on 8 August 2024, the minister stated that their task is to establish in what form the NHI needs to be implemented, as aspects of the NHI are not understood in the context of a universal healthcare structure. The minister also said he aims to provide a platform for those previously neglected to have a voice in the media and access to private healthcare, as only those biased and opposed to the NHI have received media attention.

The Minister advised that the roll-out may take up to 15 years to implement. Section 57 refers to two phases: 2023–2026 and 2026–2028 for phase 1, with an additional 5 to 7 years for phase 2. The minister indicated that we are currently in the middle of phase 1, during which regulations must be drafted and several committees appointed to regulate the roll-out phase. He further advised that 11 sections of legislation require amendments now that the NHI Act is law.

Push-Back

According to Business Tech on 12 August 2024, Minister Aaron Motsoaledi is aggressively pushing ahead with the implementation of the National Health Insurance (NHI). Michael Settas from the Free Market Foundation believes that this approach to the roll-out may face legal challenges. This was evident in the ruling against the “certificate of need” in the National Health Act.

The certificate was declared invalid and unconstitutional by the High Court, following a challenge by trade union Solidarity, which argued that “The key pillar of NHI was defeated.” Several legal disputes have been filed against the NHI, with many of its implementation strategies failing in their current state.

Following the 2024 elections, stocks elevated by as much as 23%, according to Foort Asset Management. Industry stakeholders who participated in consultations noted that their concerns were ignored and the issues raised were not considered in the final bill. Even though the NHI has been signed into law, the sections have not been enacted and are not yet in effect.

The Health Funders Association has pursued litigation against the NHI, arguing that in its current state it cannot be applied, is unconstitutional, and raises political challenges. NHI implementation is also being questioned internally within government, as well as by opposition parties like the DA and IFP, which voted against the bill. According to Mark Bechard on 8 August 2024, the ANC refused to make changes to the legislation despite input from Parliament opposing aspects of the bill.

Discovery Health CEO Ron Whelan, in a Discovery statement on eDiscoverer on 14 May 2024, expressed disappointment in the scheme, citing significant technical and constitutional flaws. Discovery also argued that without broader funding sources, the bill in its current state is unfeasible.

According to an article in Africa on 8 August 2024, Section 33 raises concerns about existing medical scheme members and the provision of care under NHI, as these schemes may only cover procedures not included in NHI. Medical schemes will remain a voluntary arrangement for members who wish to contribute to them, which could necessitate a reduction in membership fees due to a decrease in services provided.

According to Nettalie Viljoen on 23 May 2024 in Industry News, Anja Smith from Moonstone referred to multiple purchases competing on a service-level platform and warned that NHI may lock in the quality of services provided by the fund. Discovery Health further stated that without the input of medical schemes, the integration of the NHI model may be counterproductive due to insufficient resources to meet South Africa’s needs. Smith highlighted that the service provided under NHI will differ from current offerings as it moves beyond high-income patient groups.

Questions

According to several sources including Business Tech (12 August 2024), Mark Bechard (8 August 2024), Ina Opperman, Bonitas Health (19 June 2024), and Ron Whelan from Discovery Health (14 May 2024), the following questions arise concerning the implementation of the NHI:

• What type of facilities will private healthcare providers operate in, and will operating without a certificate be criminalised?
• Why is there no clear funding strategy from the government?
• How will the management of illnesses be handled by the fund?
• How will corruption within the system be addressed?
• How will administration, managed care, and wellness costs be accounted for?
• What measures will control risks for chronic illness sufferers?
• Will members still have the freedom to choose the types of plans offered?

Funding

According to Business Tech on 12 August 2024, the 2024 budget speech allocated R1.4 billion to the NHI grant over a three-year period.

Discovery Health’s Ron Whelan noted on 14 May 2024 that the lack of a clear funding plan, combined with South Africa’s constrained fiscal position, low economic growth, and narrow tax base, will only be resolved in the long term.

According to Nettalie Viljoen on 23 May 2024, the government stated that accumulated medical scheme reserves would not be taken as they belong to members. However, the act mentions that mandatory pre-payments and other taxes collected by SARS will be allocated to the fund by Parliament. The predominant funding is expected to come from payroll taxes paid by employees and a surcharge on individual taxable income.

According to Africa on 8 August 2024, the NHI seeks to provide universal healthcare within a two-tier system to gradually limit private healthcare and reverse inequalities. However, this could result in members facing both a payroll tax and medical aid premiums.

Dr Ryan Noach, former CEO of Discovery Health, warned that implementing the NHI in its current state may result in a tax revolt.

Healthcare providers will only access NHI payments once accredited and contracted within the fund. Non-contracted providers will require patients to pay out-of-pocket. This raises fears among providers about how their practices will operate and income uncertainty. Private providers will also lose the ability to set their fees, as the NHI fund will dictate payment rates. General practitioners will form part of multidisciplinary networks funded by the NHI fund.

Anja Smith from Moonstone advised that the act proposes alternative payment approaches for service providers, such as fee-for-service models.

Predictions

According to Mark Bechard on 8 August 2024, Momentum Health estimated the cost of funding the NHI at R1.3 trillion annually. According to a News24 report, this figure was derived by multiplying R21,000 in annual claims costs per private sector beneficiary by South Africa’s population of 61 million people.

Ina Opperman noted that the first phase will cost more than the current combined budget for private and public healthcare, which totals R500 billion annually.

Africa on 8 August 2024 estimated that full hospital coverage for the nation would cost R200 billion, amounting to 36% of payroll tax or 62% of corporate tax.

 


Statements

According to Business Tech on 12 August 2024, the country’s financial viability is questionable, and it would be more practical to upgrade the current public healthcare system rather than invest in the costly NHI.

Mark Bechard noted on 8 August 2024 that the minister found Momentum Health’s predictions to be “scaremongering” and dismissed them as “tantamount to mathematical hooliganism.” The minister stated that public healthcare will remain relevant, with all South Africans having access to private healthcare through NHI.

Bonitas Health on 19 June 2024 emphasised the need for rigorous governance, as the current medical aid structure operates under strict regulations and scrutiny, ensuring accountability to members as a trust fund.

Conclusion

Based on the diverse opinions expressed in the above articles, it is clear that significant uncertainty surrounds the structural roll-out of the NHI. Substantial modifications are required, and final implementation is a long way off. For now, it is advisable to retain your medical aid coverage and consult your advisor for guidance on navigating these changes.