The end of private medical aids in South Africa

Healthcare stakeholders have raised concerns around the future of private healthcare and medical aid in South Africa under the proposed National Health Insurance (NHI) scheme.

These concerns are highlighted in a new report published by Section 27 and the Concentric Alliance on Monday (20 June), which considered the opinions of 33 major stakeholders in the health sector.

The report notes that the private health sector contributes significantly to the South African economy, is a large employer and many respondents in both the public and the private sector believe it could be an important roleplayer in health reform, having excess capacity and significant resources available.

However, Section 33 of the NHI Bill states that medical schemes may only provide “cover that constitutes complementary or top-up cover and that does not overlap with the personal health care service benefits purchased by the National Health Insurance Fund on behalf of users”.

Essentially, private medical schemes that are not gap cover will cease to operate, with members covered by those schemes being required to use the NHI. This has caused significant disagreement between the private sector and the National Department of Health.

“For many respondents, across all sectors, this a non-starter and an unnecessary fight to have. Unsurprisingly, all respondents from the private sector have argued that even in countries with the most developed and extensive public health services there still exist private healthcare funders,” Section 27 said.

“Additionally, an academic argued that it would better to incentivise people into abandoning private funders by establishing a reliable and well-functioning public funder, rather than threatening to remove a functioning service.”


A hill to die on 

One concern raised by participants in the private sector was that Section 33 will constrain competition and limit the efficiency of the NHI. They argued that competition is necessary to ensure that the NHI Fund functions well.

A private sector respondent also noted that the NHI should be able to compete with private funders to promote efficiency.

Submissions on the Bill have also raised concerns about the lack of detail on the implementation of Section 33 and the transition to NHI. They are concerned that without careful forethought this section will result in many additional users moving into an already overburdened public sector, without the necessary strengthening of the public sector.

Without the appropriate steps, it is argued, this section could worsen rather than improve access to quality healthcare.

For many participants, Section 33 of the NHI Bill has become something of a hill to die on, Section 27 said.

“During the six-a-side engagements between Business Unity South Africa and the Department of Health, urgent discussions on NHI were nearly derailed by demands that Section 33 be re-opened for discussion and one respondent in the department stated that the bill was now before parliament and these issues would be addressed during public consultations.

“This respondent stated that they would rather see this point litigated, than back down. The current approach to this draft provision has the potential to undermine the implementation of the NHI and delay urgent reform to the health system,” the group said.


Read: New taxes needed to fund South Africa’s coming NHI: government

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The end of private medical aids in South Africa