NHI moving closer to becoming law in South Africa

 ·29 Nov 2023

Update: Bloomberg has corrected the article to reflect that the deferring of the vote was adopted, not the NHI itself.

South African lawmakers agreed to defer a vote on a controversial national insurance plan that seeks to reform the nation’s health system.

A motion was adopted in the National Council of Provinces on Wednesday to move the vote to 6 December.

The legislation is being presented to lawmakers after pleas from opposition parties, doctors and business groups to change it.

The bill seeks to ensure all South Africans have access to quality health-care services and provides for the establishment of a fund that will be used to pay for almost all medical treatment from accredited providers, with rates to be set by the state. Private insurers will only be able to pay for products and services that aren’t covered by the fund. 

Lawmakers have failed to consult adequately or take the concerns of numerous clinician bodies into account, according to the South African Health Professions Collaboration, which represents 25,000 doctors.  

“The potential consequences of rushing through the NHI Bill without critical amendments are far-reaching and will further undermine the country’s ability to deliver quality health care to the very patients it seeks to protect,” it said in a statement. “The bill will also have severe repercussions for the economy and the country’s long-term economic sustainability.”    

Once approved by the NCOP, the bill will be referred to President Cyril Ramaphosa, who can either sign it into law or request lawmakers to amend it. Passing the legislation without modifications would set the stage for a court challenge on the grounds that it erodes the constitutional rights of both patients and health-care professionals — and that input from interested groups wasn’t given adequate consideration. 

NHI critics argue that it doesn’t spell out how the government will raise the as much as 500 billion rand ($27 billion) that’s estimated to be needed to fund it — it merely states that money will come from general tax revenue, payroll taxes, surcharges on personal income tax and the reallocation of funding for tax credits that are currently paid to private insurers.

About 16% of the population have private medical insurance and account for just over half of national expenditure on treatment, while the balance of the money is spent on the other 84% of the population who rely solely on an overburdened public health system — a spending mismatch health officials say NHI will address. 

The problem, according to Discovery Ltd., the country’s largest medical-insurance provider, is the same people who pay to secure private treatment already fund about 80% of South Africa’s public health-care needs through taxes. 

Busi Mavuso, the chief executive officer of Business Leadership South Africa, warns that NHI as currently envisaged in the law would ultimately leave all South Africans worse off, with the state unable to provide adequate services and private provision effectively closed down. 

Read: Big NHI surprises ahead for South Africa

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