The National Health Insurance Bill aspires to provide accessible healthcare to all South Africans, but many question whether this will be the case in practice
In June, the Nation Health Insurance (NHI) Bill was adopted by the Parliamentary Portfolio Committee on Health and approved by National Assembly. The Bill aims to create better universal healthcare by grouping the public and private healthcare in one system that will service all South Africans.
Through the NHI Bill, a Fund will be established to purchase healthcare services and products from accredited healthcare service providers and health establishments (such as hospitals), including private service providers that contract with the Fund.
The goal is to provide affordable, quality healthcare for everyone. While this sounds wonderful in theory, the big question is whether government can deliver on its promise in practice. Many still have reservations about the Bill.
Prelisha Singh, head of public law at Webber Wentzel, comments: “The concept of universal healthcare or universal health coverage is generally supported, on the understanding that it will grant access to healthcare services by all who require access.”
“However, in the context of the realities facing our country and the significant lack of resources, the Bill will not be able to realistically provide quality healthcare to everyone,” she explains. “That is because, by removing the two-tier healthcare system, the already overburdened public healthcare system will simply be overloaded.”
“Unfortunately, public hospitals are already suffering from a lack of budget and there is little chance that the NHI will be able to provide adequate healthcare until such a time as the basic infrastructure is fixed first,” she adds.
The government has indicated plans to address the quality of the healthcare services and overcome budgeting issues, but whether these are realistic is another question.
Quality of care
The goal is to roll-out the Fund over several stages. During the first stage (estimated to take up to five years), government aims to upgrade current public sector facilities while implementing the NHI infrastructure.
“Government will upgrade all facilities to ensure that there is no difference between a public and private facility – all NHI facilities have to be at the same standard because they will have to follow the rules of the Office of Health Standards Compliance to be part of NHI,” the government NHI brochure reads.
Part of the upgrades includes “refurbishing clinics and hospitals, train and employ more staff, improve the quality of healthcare, implement systems to ensure that medicines do not run out of stock [and ensuring] that maladministration and corruption is uprooted so that all facilities will be ready for NHI”.
These upgrades are sure to be costly without the cost of implementing the NHI infrastructure and administration needed.
In a press release, partners at the law firm Webber Wentzel, Martin Versfeld, Prelisha Singh, Glenn Penfold and Robert Appelbaum write: “Many stakeholders and experts have raised concerns that the NHI scheme envisaged in the Bill is simply unaffordable, particularly as it would require an extensive administrative apparatus.”
“Given the dire state of public healthcare in our country, it is surprising that the government persists with plans to spend vast resources on implementing the NHI. Those resources would greatly improve the delivery of quality healthcare – and universal access to that care – if they were deployed directly in the public health sector,” they argue.
Why implement a new system instead of improving the system that already exists? Surely, that will be more affordable.
Footing the Bill
Currently, the public healthcare system is funded by the taxpayers, while private healthcare is funded by medical schemes.
Experts estimate a ridiculous R660 billion will be needed to fund the NHI. In 2023, the public health budget was R60 billion, which government confirmed meant that the sector was underfunded by at least R11 billion.
By combining public and private healthcare funding, government can tap into the money paid to medical aids; however, this is unlikely to fill the massive gap in funding required.
At the end of 2021, there were 4,06 million main members with the various medical schemes. A further 8,94 million South Africans were beneficiaries, which includes non-working individuals such as pensioner or children. These 13 million medical aid members make up only 22 percent of the total population in South Africa, and six percent of employed South Africans.
Prelisha notes: “The current health budget and medical scheme tax credits won’t be sufficient to cover the shortfall hence the need for an additional tax to be levied.”
Government has stated that there won’t be a tax for NHI “initially”, but there might be some tax implemented at a later date.
“The government will pool the funds that already exist in the public sector to start the NHI. When the NHI is up and running, then Treasury may introduce a small tax to augment the money allocated through the public budget,” it says.
The Bill doesn’t specify how this tax will be collected, but this could be in the form of an income tax, increased VAT, corporate income tax or a combination.
Government refers to this tax as “mandatory prepayment”, which requires payment for healthcare services before it is needed according to income levels.
“NHI will eliminate out-of-pocket payments when the population needs to access healthcare services. In the long run, households will also benefit from increased disposable income as a result of a significantly lower mandatory prepayment,” the government states in its White Paper on National Health Insurance.
But with unemployment at 32,6 percent and 75 percent of employed South Africans earning below R5 800 per month, it is hard to imagine how these taxes will increase disposable income as well as fund the NHI.
Freedom to choose
While the NHI does promise access to quality healthcare, it doesn’t allow for much freedom of choice. It requires individuals to register with the Fund at a registered facility near the individual’s home or work. This will be the individual’s main healthcare facility.
If the individual needs to see a specialist, or would like to access another facility (for example, a rehabilitation centre), they would need a referral from their main healthcare facility.
If the individual makes use of an unregistered facility, or bypasses the referral process, they won’t be reimbursed by the NHI. The individual thus doesn’t have a choice in the facility or specialist they see, but is dependent on the referral process of the facility with which they are registered.
Prelisha says: “Specific details around the referral process are still to be prescribed (by way of regulations) and it is difficult to say with certainty what the impact will be on individuals who require specialised treatment. Onerous referral pathways could severely impact on individuals’ ability to access specialised treatment.”
Constitutional challenges
The Webber Wentzel team also made a case for the infringements on various Constitutional rights. They write:
“This regime is likely to face constitutional challenge, including on the basis that it infringes: (a) the right to access healthcare services, by forcing many people who currently access private medical care via medical scheme funding to rely on what is currently a woefully inadequate public healthcare system; (b) the property rights of medical schemes and their administrators; and (c) the right to freedom of trade, occupation and profession.”
While many of these rights impact the those in the medical field more directly, the right to access to healthcare is a key issue for all South Africans.
Prelisha explains: “If the NHI Fund is fully submitted, medical aid schemes may only offer complimentary cover to services not reimbursable by the NHI Fund.
“The Bill will therefore increase the burden on the state, even if one assumes that the contributions which would have been paid over to medical aid schemes, is now contributed to the NHI Fund in the form of imposed tax.”
“There is a real possibility that instead of improving the right of access to efficient healthcare services, the existing right to access to healthcare, which members of private medical aids currently hold and pay for, may be diminished by the very Bill which aims to achieve the realisation of the right,” she explains.
It is not only medical aid members who might not get access to healthcare, but anyone who is not registered with the Fund.
“It is further submitted that some of the provisions contained in the Bill will have the additional likely effect of preventing access to healthcare services, especially if a person who is eligible to receive healthcare services has not registered with the NHI Fund,” Prelisha notes.
Uncertainties
One of the big concerns with the Bill in its current form is that many key issues are left to be determined later – for example how the process of referrals will work, or the type of medical equipment, devices and supplies will be provided. This makes it difficult to determine whether the NHI will be able to provide adequate healthcare.
Where to next?
The Bill is currently before the National Council of Provinces (NCOP) where the Select Committee will conduct its set of public participation processes.
Thereafter, the Bill will be debated with one of three outcomes:
- The NCOP passes the Bill without amendments after which it is submitted to the President;
- The NCOP passes an amended form of the Bill, which must first be referred back to the National Assembly (NA) to be approved before it is submitted to the President; or
- The NCOP rejects the Bill, or the NA refuses the amendments, at which point it is referred to the Mediation Committee for further deliberations.
“The precise date of implementation of the Bill (if approved) is difficult to pre-empt as it depends on how the legislative process unfolds,” Prelisha says.
“For example, if the President has reservations about the constitutionality of the Bill, he may wish to refer it to the Constitutional Court or back to Parliament for their reconsideration,” she continues.
If the President approves the Bill, it becomes an Act. It can only take effect when it is published in the government gazette or on a date determined in terms of the act.
A rough timeline, based on a study by the Parliamentary Monitoring Group, estimates it would take 153 days for the introduction to adoption, 96 days for the President to assent, and another 161 days for the commencement.
“The first of these processes is yet to be complete, meaning the implementation of the Bill is at the very least some 250 days away,” Prelisha notes. “This is assuming that the legislative process runs smoothly – that the NCOP approves the Bill without amendments and/or that the President does not refer the Bill back to Parliament or to the Constitutional Court.”
“It is important to note that the Bill might also not be brought into full implementation at the same time and certain provisions might be introduced incrementally or in a staggered fashion,” she adds.
While the implementation of the NHI is some ways away – if at all – it is worthwhile to rethink the approach to universal healthcare. Should government perhaps consider allocating more existing tax funds to healthcare to upgrade facilities? Or is a combined revenue pool for healthcare the true solution to affordable, quality healthcare in South Africa?
