How will the NHI affect you?

In essence, the National Health Insurance (NHI) bill proposes that government will set up its own medical aid scheme that in many ways will function like the existing ones.

The NHI bill has passed the first hurdle towards becoming law by being passed by the National Assembly. The National Health Department (NHD) explains that, under the NHI, every South African will have a right to access comprehensive healthcare services free of charge at the point of use at accredited health facilities such as clinics, hospitals and private health practitioners. This will be done using an NHI card and the services will be delivered closest to where people live or work.

The NHD says that the NHI will be run as a non-profit public entity and aims to keep the cost of healthcare reasonable while ensuring that healthcare providers receive fair compensation for their services. The NHI will pay public and private healthcare providers on equal terms.

Implementation of the NHI

The NHI will be established through the creation of a central fund that will buy services on behalf of the entire population. It is planned that the NHI will offer all South Africans, as well as legal residents, access to a defined package of comprehensive health services. The service offering will range from primary health care to specialized levels of care.

How will the NHI be funded?

According to the NHD the NHI will be funded through a combination of various mandatory pre-payment sources, primarily based on general taxes. It is envisaged that consumers with low income will not make any direct payment to the NHI Fund, however, every person earning above a set amount will be required by law to contribute. All employees will make monthly contributions to the fund and the contributions will be larger for higher-income earners. Employers will be required to assist the NHI Fund by ensuring that their employee’s NHI contributions are collected and submitted. Employers will also have to match their employees’ contributions to the NHI.

What is the proposed role of medical schemes under the NHI?

While individuals will be able to continue their medical scheme membership, they will not be able to opt out from making contributions to the NHI Fund. The government will also no longer provide tax subsidies for medical scheme contributions.

Discovery Health have stated that they are supportive of structural change that assists in strengthening and improving the healthcare system for all South Africans. Discovery adds that the NHI is a huge, complex and multi-decade initiative and a considerable amount of debate and effort will be required to make it workable.

A central issue is the future role of private healthcare and medical schemes once the NHI is implemented. The NHI Bill states that when the NHI is ‘fully implemented”, medical schemes will not be able to provide cover for services that are paid for by the NHI. Discovery is of the view that limiting the role of medical schemes would be counterproductive to the NHI because there are simply insufficient resources to meet the needs of all South Africans.

Discovery Health also believe that limiting the rights of citizens to purchase additional health insurance, after they have contributed to the NHI, would be globally unprecedented and inappropriate. “In virtually every other country with some form of NHI, citizens are free to purchase additional private health insurance cover, including cover that overlaps with services covered by the national system,” the scheme says.

Conclusion

Professor Benjamin Smart, director of the Centre for Philosophy of Epidemiology, Medicine and Public Health at the University of Johannesburg says that NHI is, at its heart, a noble idea, and that in a country with a high GDP, low unemployment and a trustworthy government, it might well be a good solution. Unfortunately, South Africa does not fall into that category as the country has low economic growth, one of the highest unemployment rates in the world, a small tax-base, and the ruling party is frequently caught up in corruption scandals. Smart says that consumers could understandably fear that the NHI will simply be another way for corrupt officials to get their hands on more of the taxpayer’s money.

The South African Medical Association (SAMA) agrees with Smart’s sentiments and adds that it is a well-known fact that our weakness as a country is corruption and that we cannot be collecting such large sums of money without measures to ensure that it is safe. SAMA is also of the opinion that there should be a thorough assessment of the funding options, so the payments are not excessive for any sector or group.

Craig Comrie, chief executive of Profmed, stresses that, despite being years down the line from its introduction in 2006, there is no clarity on what benefits the NHI will cover and how it will be budgeted for or financed. Comrie estimates that the NHI would probably cost more than R500 billion per year and that even with the NHI, people will have to rely on medical schemes to provide what is not covered by the NHI due to overwhelming demand.

According to Smart, there will be many legal battles involving the existing medical aid schemes, private hospitals, and other stakeholders, concerning the bill’s constitutionality. This could take a very long time, and he is not anticipating any real changes for at least 10 years, by which point the bill might have been changed beyond recognition.

Dr Ryan Noach, CEO of Discovery Health, agrees with the above and says that even in the state’s best- case scenario (i.e., no legal challenge from the private sector) it will be decades before the proposed NHI would be fully implemented.

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