President Cyril Ramaphosa signed the National Health Insurance (NHI) Bill into law on Wednesday 15 May 2024. This event comes with much uncertainty for the healthcare sector as well as members of private medical aids.
It is a health financing system that is designed to pool funds to provide access to quality and affordable personal health services to all South Africans based on their health needs, irrespective of their socio-economic status. The intention of the Fund is to pay for healthcare for all South Africans.
There are still questions surrounding what the services benefits package is likely to be. The intention is that NHI will buy quality healthcare services on behalf of the people of South Africa. The NHI Fund will enter into contracts with private health providers.
Although the government indicated that initially there will be no additional tax requirements for the NHI, this is contrary to Treasury’s view that there is no funding plan as yet, given the country’s constrained fiscal position, low economic growth and narrow tax base. It is estimated that in order to implement, NHI would cost the fiscus in excess of an additional R200 billion a year – with some estimates as high as R1 trillion a year.
At this stage it is believed it will be a few years, or even decades, before full implementation and even when it starts, a phased approach is anticipated. We await more clarity from the Department of Health.
Adrian Gore, CEO of Discovery Limited, stated in a communication to members of Discovery Health Medical Aid “even when the NHI is ‘fully implemented’, medical schemes will still be able to provide cover for benefits not covered by the NHI. This is important because the NHI is unlikely to have sufficient funding to provide an extensive package of benefits. This is because our country unfortunately faces significant financial constraints linked to low economic growth and a very narrow tax base. Medical schemes will therefore still play a significant role post full implementation of the NHI.”
There are no immediate consequences for members as implementation of the law is a process that will take time. There are many structures that need to be put in place to effect this law including, implementing a board, financing, public health system redesign, defining of benefits under NHI, negotiations with health care providers, etc.
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