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National Health Insurance bill signed

President Cyril Ramaphosa signed into law the controversial National Health Insurance.

National Health Insurance bill signed into law

Without much warning, President Cyril Ramaphosa signed into law the controversial National Health Insurance Bill, 14 days before the national elections. Health Minister Joe Phaahla said at the signing ceremony at the Union Buildings, “This is a historic milestone in our nation’s health policy. This move sets us on a course where all South Africans get free access to healthcare.” Ramaphosa looked triumphant when he took to the podium, despite being 30 minutes late. He said, “This vision is not just about social justice. It is about efficiency and quality for healthcare in South Africa, which is currently fragmented, unsuitable and wholly unacceptable. “The passage of this bill sets the
foundation for parallel healthcare systems. With the NHI, access to quality care will be determined by need, not the ability to pay, which will have better health outcomes and
prevent avoidable deaths.”

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Key notes from his speech:

• Those trying to hold this back are out of lline with the global vision that has been set
• Private sector healthcare services a fraction of society at a higher cost without a proportional improvement in health outcomes
• Challenges lie not in the lack of funds but in the misallocation of resources that currently favours the private healthcare sector at the expense of public health needs
• Reallocation of funds already in the  healthcare system.

What South African law says

• Everyone has the right to have access to health care services, including reproductive health care
• The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights;
• No one may be refused emergency medical treatment. The Freedom Charter Free medical care and hospitalisation shall be provided for all, with special care for mothers and young children.


What does the NHI hope to achieve:

• Provide universal access to quality health care for all South Africans.
• No one is deprived of the abovementioned rights because of their socioeconomic status.
• One public health fund is created with adequate resources to plan for and effectively meet the health needs of the entire population, not just for a selected few; and
• The ultimate goal is to achieve Universal Health Coverage (UHC).
• The NHI fund will cover South Africans of all races, rich or poor and legal longterm 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.
• 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.
• While no amount has been confirmed, expert estimates put the cost of the NHI at between R2–3 billion.


Q&A in brief following the signing

Q: Timelines and what to expect?

A: There are two phases

1. 2023–2026: Establishment of the institution, acceleration of the implementation of a health platform and other basic instruments. Quality improvement programmes in all provinces are to be deployed from primary healthcare to specialised services.

2. Up to 2028: Conclusion of implementation of contracting services. Vulnerable groups to be catered to first, for example, many primary care centres don’t have enough physiotherapists, audiologists, etc. General practitioners (GP) to be included at a district level to provide services from their rooms.

Q: Funding – where will the money come from?
A: Can’t rely on the normal fiscus – different funding models will be tested for infrastructure and equipment.

The official site for the NHI (www.Health.gov.za/nhi) states the following:

• The NHI will be funded through a mandatory pre-payment system and other forms of taxes collected by SARS and allocated to the Fund by Parliament.
• The NHI will be predominantly funded through general revenue allocations, supplemented by: (1) a payroll tax payable by employers and employees and (2) a surcharge on individuals’ taxable income.
• The financial impact of the NHI taxation system must not create an increased burden on households compared to the current system. There will be no option for opting out of NHI for eligible people.
• Out-of-pocket payments such as copayments and user fees will not be used to generate additional funding for comprehensive health care services to be covered under NHI. This ensures that healthcare services are delivered free of charge at the point of service and that the most vulnerable are not denied access.Q: What about corruption?
A: Three years ago the Health Sector

Anti-Corruption Forum was established. The Special Investigating Unit has given updates on this. The police and other health agencies are also involved. Strict control systems will be in place to assure accountability and regular reporting back to Parliament, among others.

Q: What about court cases to challenge the NHI?
A: We are aware of about seven, mostly from people who do not want to move out of their ‘comfort zone’. There is no fear from us from any of the potential court action.



As of 2022
• 8.5% of GDP goes to healthcare
• 15.8% of the population are members of medical aid schemes
• GEMS, the governmental scheme, has about two million members
• This leaves approximately 52 million people dependent on public healthcare *84.2%)
• 72 medical schemes in South Africa *Sourced from various places including StatsSA and the Council for Medical Schemes

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Discovery CEO, Adrian Gore Discovery

one of the largest medical aid schemes in the country is led by CEO Adrian Gore. “Discovery unequivocally supports universal health coverage and believes that a workable NHI is central to achieving this. We will continue to advocate for an NHI that is viable and to the benefit of
all South Africans. “There is no funding plan yet and, given the country’s constrained fiscal position, low economic growth, and narrow tax base, this can only be solved in the longer term. We see no scenario in which there is sufficient funding for a workable and comprehensive NHI in its current form – hence our conviction that private sector collaboration is vital and that full implementation of the Bill remains a long way off – likely decades.” Our analysis shows that NHI funding of R200 billion would require massive changes to tax policy which the fiscus cannot necessarily accommodate, for example:

• R200 billion from VAT would require an increase in VAT from 15% to 21.5%. OR
• R200 billion from Personal Income Tax means that tax rates would need to increase by 31% across the board – each taxpayer will need to pay almost one-third more than their current tax payments which is a massive erosion of take-home pay, OR
• R200 billion as a payroll tax would require a collection of around R1 072 per employee per month. This increases to around R1 565 per employee per month for only those employed in the formal sector. None of these options are affordable or realistic.


Professor Alex van den Heever

Wits School of Governance Adjunct Professor Alex van den Heever gives a less than enthusiastic assessment of the Bill being signed into law. “Some of the general assertions that have been made to motivate for reforms have been shown to be factually incorrect. The problem with this proposal is that it oversimplifies its options and assumes it can just merge public and private sector spending with the government system.

Professor Alex Van Heerden
Professor Alex Van Heerden

He says that is not possible, “Without increasing taxes and the tax base is already at its limit. “Government is basically squeezed, and our deficits are increasing not decreasing and that is already indicating the limits that our taxes can raise at this point. “The fact that someone already contributes to a medical scheme does not imply that that money can be switched into a tax. That is a fundamental flaw in the overall design.” He says none of the technical assessments that are required to review this kind of reform have ever been done. “There has not been a financial appraisal of this proposal – nobody has looked at what exactly can be done and achieved. If you don’t do any financial appraisal, then you don’t know whether your reform can work.”

“The government, or the ANC, assumes what it can achieve with this NHI is possible while it is an incredibly complex undertaking for a government that is very fragile at the moment.” As to what happens next, Van den Heever says of the signing, “There is no possibility of implementing anything related to this Bill which means that it potentially reduces to a performative exercise instead of an actual real reform that will help people.” He says provincial health services will continue because you cannot ‘wreck the entire multi-level system of government to finance the NHI’ and ‘hospitals and the public sector will continue to be run poorly because of poor governance’. “The private sector which has had a major set of investigations for its reform through the health market enquiry will continue as it is doing now because the government has failed to implement the recommendations of the health market enquiry.”

Khulekani Mashe, Business Unity South Africa, deputy CEO

“We support objectives and goals of universal health coverage. We are concerned about whether the bill in its current form takes us to its objective. Our view is that it
does not.” He says that to overcome the deficiencies it has that makes it hard to implement, the necessary building blocks need to be in place. He says healthcare workers will be needed for it to succeed, yet they too are raising the alarm, which suggests ‘the building blocks are not in place’.

Khulekani Mashe

“To create the impression that this Bill will suddenly increase the amount of resources available does not go far enough and we are not being told the whole story”

 Siviwe Gwarube MP – Chief Whip of the Official Opposition (DA)

“Section 27 of the Constitution is clear about government’s responsibility. However, the ANC’s track record of failure in delivering this fundamental right is evident in the countless horror stories emerging from hospitals and clinics nationwide.” She says the proposed NHI scheme is ‘nothing more than a political tool wielded by the ANC to manipulate voters in this upcoming election.’

Siviwe Gwarube MP – Chief Whip of the Official Opposition (DA)
Siviwe Gwarube MP – Chief Whip of the Official Opposition (DA)

“The centralisation of such vast sums of money under the control of a single minister and a board raises serious concerns about the potential for corruption and mismanagement, akin to the scandals that have plagued other state-owned enterprises (SOEs) like Eskom. The NHI presents a fertile ground for corruption. “The exorbitant cost of implementing the NHI … coupled with a shrinking tax base and a significant portion of the population living in poverty or unemployed, makes it clear that the burden of funding this scheme will fall disproportionately on South African taxpayers. South Africans simply cannot afford to pay more tax and we will see tax emigration en masse, as a result.”

Advocate Stefanie Fick from Outa

Advocate Stefanie Fick from Outa says that it fully supports the constitutional right of all South Africans to proper healthcare but warns that government is creating false hope by signing the NHI Bill into law just two weeks before the national elections. For a universal healthcare system to work, you need enough funding and proper management, something that is sorely lacking at this stage of the country’s history. “There simply isn’t enough money for what is envisioned by the NHI Bill.”

“It should also be noted that there is a national healthcare system in place at the moment, but it has been badly managed and hollowed out by corruption.”

Stefanie Fick

“What will stop this from happening with the NHI? One just needs to look at Eskom, Prasa, Transnet or the SABC – to just name a few entities – to know that government does not have the capacity to efficiently run a national health system of this magnitude. “Various role players in the healthcare system have voiced their concerns – from
professional bodies representing medical professionals to medical aids, academics, civil society, and economists, but it is apparently just ignored. Why the rush with signing the Bill into law? “Government still hasn’t learnt that simply legislating new policy won’t magically make it work – just like with AARTO and e-tolls.”

Dr. Simon Strachan, spokesperson for the SAHPC

South African Health Professionals Collaboration (SAHPC) is a national group of nine medical, dental and allied healthcare practitioners’ associations representing more than 25 000 dedicated private and public sector healthcare workers. SAPHC also believes its members’ concerns and recommendations throughout the parliamentary process were systematically ignored, raising serious questions about the fairness and effectiveness of the democratic process. Dr Simon Strachan, a spokesperson
for the SAHPC, says, “Our members have made submissions at every stage of the legislative process, dating back to the release of the green paper in 2011. It is disheartening to see our efforts to contribute to a more robust, workable and patient-centric healthcare system being ignored. Where we are now is unprecedented, and we believe that the NHI Bill.

“In its current form will reverse, rather than progress, equitable, quality healthcare in South Africa.”

“We have no doubt that the NHI Bill will be challenged in the courts, and we are currently exploring all our options in this regard.”

Jack Bloom

“You can think of NHI as a giant Eskom for healthcare, raising taxes to pay for it and forcing all private health money into a giant state entity that will be corrupt and inefficient.”

Jack Bloom DA

“A government that cannot provide good public hospitals will now have even more money to loot. It’s pushing away a lot of skilled medical personnel, even though it will be challenged in court and unlikely to be implemented soon.”

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