June 24, 2024

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South Africa’s National Health Insurance (NHI) Bill: Why it is controversial

6 min read

Farouk Chothia,BBC News, Johannesburg

Getty  Medical student Lwando Mpotulo (c), age 23, examines a patient in a ward at GF Jooste hospital on October 21, 2010, Cape Town, South AfricaGetty

South Africa’s President Cyril Ramaphosa has approved a controversial new law that will lead to the biggest shake-up in the health sector since the end of the racist system of apartheid 30 years ago.

It promises universal health care for all, but has faced fierce resistance from the main opposition Democratic Alliance (DA), which has accused the president of signing the “death warrant” of health care in South Africa.

It warns that the scheme could be hugely expensive, and fuel corruption.

What does the law say?

The National Health Insurance (NHI) scheme advocates the creation of a state fund to cover the medical costs of all South Africans – most of whom are not currently covered.

It goes further to bar people from taking out private health insurance for treatment paid for by the fund, which is proving very controversial.

“Once the NHI fund covers a benefit, the medical schemes will not cover the same benefits,” the government says.

This is unlike countries such as the UK, which has the state-funded National Health Service (NHS), but where people are free to take out medical insurance to receive any treatment they want from private doctors and hospitals.

“South Africans will no longer be required to contribute directly to a medical health scheme to get quality health care,” an explainer on the parliamentary website says.

Once the NHI scheme is fully implemented “the role of medical schemes will change as they will provide cover for services not reimbursable by the NHI Fund”, it says.

South Africa’s private health insurer Discovery says the scheme is “globally unprecedented as in virtually every other country with some form of health insurance, citizens are free to purchase additional private health insurance cover, including cover that overlaps with services covered by the national system”.

In a post on X, formerly Twitter, the government says that everyone will be able to “access NHI-contracted GPs, clinics or hospitals closest to them, whether in the public or private sectors”.

“This means that when you feel unwell, you can go to your nearest GP or clinic that has a contract with NHI and not worry about the cost of care,” it adds.

The government has not specified the treatments that NHI-accredited private hospitals and GPs will have to provide, but says it will include emergency services, mental heath services, palliative care and rehabilitation services.

Why has the government come up with the scheme?

Mr Ramaphosa says the NHI is an “important instrument to tackle poverty”.

“The rising cost of health care makes families poorer. By contrast, health care provided through the NHI frees up resources in poor families for other essential needs. The NHI will make health care in the country as a whole more affordable,” he adds, in comments posted on X after he signed the bill into law.

The scheme is seen as an attempt to boost the chances of the governing African National Congress (ANC) in the 29 May election at a time when opinion polls suggest the party could lose its outright majority for the first time in 30 years.

On the campaign trail, Mr Ramaphosa has made the NHI one of his major pledges to voters.

“We are going to end the apartheid that remains in health care, where you have the best healthcare for the rich and poor healthcare for the poor,” he said at a rally last month.

The centre-right DA has come out strongly against the NHI in a bid to rally its voters.

In a statement on Tuesday, DA leader John Steenhuisen said the scheme would lead to “enormous tax increases” with the money “deposited into a central fund controlled by one almighty ANC cadre”.

“The looting that will take place is easy to imagine, yet too ghastly to contemplate. Just like ANC cadres looted [power utility] Eskom to the point of collapsing our electricity supply,” he said.

How will NHI be paid for?

The parliamentary website identifies three main sources of funding:

  • general taxes
  • contributions by people earning above a set amount (which has not been specified) and
  • monthly contributions made by employees to the fund.

The government has not spelt out how much people will have to contribute or how much will be required to fund NHI.

Nevertheless, the explainer on the parliamentary website says the “cost of our health-care system, which is currently the most expensive in the world, will be reduced”.

“When people visit health-care facilities, there will be no fees charged because the NHI fund will cover the costs of people’s medical care in the same way that medical aids do for their members,” it states.

The DA takes a different view, accusing the government of wanting to “tax to death” South Africans.

It says the scheme will cost “well in excess of 200 billion rand [$10bn; £8.6bn] per year – with some estimates as high as one trillion rand”.

So what happens next?

The DA says it will institute legal action in a bid to stop the scheme being implemented.

It says it stands for universal health care, but the NHI will “destroy South Africa’s private health-care system and thereby sabotage any chance of fixing our public health system”.

“Just this week, nine healthcare associations, representing 25,000 health-care professionals, pronounced NHI unworkable,” Mr Steenhuisen wrote in an article published on the News24 website.

The Daily Maverick reported that the government was likely to face an “avalanche” of litigation, including from the South African Medical Association.

One of the main arguments against the legislation is that it will curtail the right of people to take out private health insurance to cover their medical bills.

Critics say this is unconstitutional – a view that the government rejects by arguing that it is in fact fulfilling its constitutional obligation to provide equal health services to all – rich and poor.

The opposing sides are likely to battle it out in South Africa’s highest court, which will have the final say on whether or not the legislation can be implemented.

Even if the Constitutional Court gives the green light, the scheme is likely to be introduced gradually over many years – not least because the government will first have to come up with the money to finance it.

This will be a difficult task as South Africa is in deep financial crisis, and the government is battling to provide existing public services – including electricity and water, not only to businesses and homes, but even to some state hospitals.

How many South Africans rely on private and public health care?

The government says that about 14% of the population have private medical care, but their costs are rising without “much improvement on health outcomes”.

The remaining 86% of the population cannot afford to pay for medical aid, and rely on state clinics and hospitals which, the government acknowledges, are “overburdened”.

So it has come with a scheme that will see the rich and poor getting health care without a GP or private hospital first demanding payment – something that currently happens even if a patient requires emergency treatment for a life-threatening condition.

The concern of private hospitals is that the government’s scheme will lead to them being overwhelmed with patients, with no guarantee that they will receive payment from what could be a badly managed NHI fund.

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More about South Africa’s 2024 election:

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