The end of medical aids in South Africa – and other questions raised around the NHI

Health groups are seeking further clarity around the exact details and workings of South Africa’s new National Health Insurance (NHI) – specifically asking questions about how money is going to be pooled to fund the scheme.

Presenting to parliament on the NHI on Tuesday (1 June), the Khayelitsha and Klipfonetin health forums said that a proper analysis is needed to see whether South Africa is in a financial position to even fund the NHI.

The analysis should also look at whether there is sufficient trust by the public that government will be able to deliver an NHI that is inclusive of community participation in all facets, it said.

“There is a view that perhaps we need to be building our public healthcare system as a priority to ensure a successful transition to an NHI Fund,” it said.

The forums also raised concerns around what the NHI will mean for existing healthcare systems – including the future of the country’s medical aids.

“Clarity is needed with respect to how the NHI Bill will address the transition between private medical aids and a universal healthcare system for all.

“The gap between private and public healthcare needs to be bridged and how this is done is important.”

What happens to medical aids? 

The NHI Bill currently states that when the system is “fully implemented”, medical schemes will not be able to provide cover for services that are paid for by the NHI.

South Africa’s largest private medical scheme Discovery Health has said that it is broadly supportive of the structural changes being introduced through the NHI, but it has cautioned limiting medical aids.

“Our strong view is that limiting the role of medical schemes would be counterproductive to the NHI because there are simply insufficient resources to meet the needs of all South Africans.

“Limiting people from purchasing the medical scheme coverage they seek will seriously curtail the healthcare they expect and demand. It poses the risks of eroding sentiment, and of denuding the country of critically needed skills, and is impacting negatively on local and international investor sentiment and business confidence.”

Crucially, by preventing those who can afford it from using their medical scheme cover, and forcing them into the NHI system, this approach will also have the effect of increasing the burden on the NHI and will drain the very resources that must be used for people in most need, the scheme said.

The NHI currently makes no reference to the likely costs of the scheme once fully implemented.

However, the department of health has said that that payroll taxes and a surcharge on personal income tax could be considered as sources of funding. Such taxes would need to be determined by National Treasury.

Moving forward

The NHI Bill was presented to and approved by cabinet in July 2019, and has been presented to parliament’s health portfolio committee.

It has since been subjected to an extensive public consultation process through committee roadshows and is scheduled for further parliamentary debates before it is presented to the president for promulgation.

At the start of May, the Council for Medical Schemes (CMS) said that the government’s planned National Health Insurance is in full development, with plans to move to phase 3 of the programme from next year.

In its 2021/2022 annual performance plan, the CMS said that phase 3 will include mandatory pre-payment of the new scheme, contracting for accredited private hospital and specialist services, and finalisation and implementation of the NHI Act.

“This (current) period coincides with the beginning of the second phase of the implementation of the NHI,” the CMS said.

“The CMS sees its role as playing both a supportive and a direct role in the delivery of all the activities according to the Act that should occur in the private sector.”


Read: Experts warn that South Africa’s NHI plan has a major flaw: it’s not going to work

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The end of medical aids in South Africa – and other questions raised around the NHI