What the new National Healthcare Insurance Bill says about who will pay – and where medical aids still come in

 ·21 Jun 2018

The Department of Health has gazetted the National Healthcare Insurance Bill for wider public comment on Thursday, laying out government’s plan to set up a universal healthcare fund.

While the bill gives a more detailed overview of how the NHI system to work, it does little in the way of addressing the cost.

According to the document, the only reference it makes to the source of money to pay for the universal healthcare plans is to say that the minsters of health and finance will need to determine how much of the annual budget is allocated to the fund on an annual basis.

This allocation should be guided by how much of the population the fund is covering, and the average cost to services registered members’ healthcare.

Read: These are the 10 massive medical aid changes you need to know about

Other sources of money include:

  • Money appropriated by parliament;
  • Interest and returns made on money invested by the fund;
  • Donations to the fund;
  • Movable and immovable property purchased or acquired by the fund; and
  • Any other money which the fund may be legally entitled to.

What the bill does not address is how the finance department will come up with the money to bulk up the national budget to make the national fund affordable – nor does it give any indication to how much the scheme is projected to cost.

The initial White Paper on the NHI estimated the cost of healthcare under the scheme to hit R256 billion by 2025 based on 2010 prices – using ‘optimistic’ economic metrics. Even with a positive economic growth trajectory, the shortfall for funding could easily hit R100 billion, according to analysts.

Meanwhile, South Africa is already in a precarious financial position, with a budget shortfall of over R50 billion in this financial year alone, with National Treasury cutting R85 billion from department spending over the next three years.

In the national budget this year, the finance minister allocated an additional R4.2 billion to NHI.

It has been suggested that two ways the NHI fund could be financed is through the standing medical aid tax credit, which would fall away, and other additional taxes. However, these have only been alluded to or speculated on, with no formal plan yet in place.

However, this would be in line with health minister Aaron Motsoaledi’s statement that it was time for the rich, young and healthy in South Africa to subsidise the healthcare of the old, poor and sick.

How the NHI will work

According to the bill, the NHI scheme will effectively bring ‘free’ universal healthcare to every South African.

This would be done through the establishment of the NHI Fund, a mandatory pre-paid health service system, and the single public purchaser and financier of health services in the country.

The fund will act in this role for all South African citizens who must register as beneficiaries of the scheme, along with their dependents.

Through the fund, registered members have the right to quality healthcare, free of charge, from certified and accredited providers. These providers, in turn, will be fully reimbursed by the fund.

The only time that treatment won’t be funded is when there is no medical necessity for the treatment or there is no cost-effective intervention for the service. In such cases, members need to be informed and can also challenge the decision.

Where medical aids still come in

According to the bill, the fund has to cover comprehensive health services, but members have to register with a primary healthcare provider of their choice.

No other healthcare services (specialists or hospitals) can be sought out unless referred by that primary provider.

If a member fails to follow the referral lines, or is otherwise not entitled to health service benefits or wants services that are not medically necessary, they will need to pay for those services themselves, or through other private schemes.

The full document is embedded below, or can be downloaded here (41725).

National Health Insurance Bill, 2018 by BusinessTech on Scribd

Read: These 4 graphs show how many South Africans don’t have medical aid – and the surprising rise of traditional healers

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