Ramaphosa taps the brakes on the NHI
President Cyril Ramaphosa says that the Government of National Unity will push ahead with implementing National Health Insurance (NHI) in South Africa – but the approach has taken on a more muted tone, with an emphasis on renewed collaboration with the private sector.
Delivering his opening of parliament address on Thursday (18 July), the president said that equitable, accessible, affordable, and quality healthcare will be high on the agenda of the seventh administration over the next five years.
“An important task of the next five years is to ensure that we also reduce the high cost of living by ensuring that everyone in South Africa has equal access to equitable, accessible and affordable quality healthcare.”
The president said this would be done through the NHI, where the state would concentrate on strengthening healthcare infrastructure, enhancing the training of healthcare personnel, and utilising technology to improve healthcare management.
However, contrary to the bold and confident positioning ahead of the 2024 elections that the NHI would be implemented “like it or not“, and in the face of mounting legal challenges and backlash from various sectors of society, Ramaphosa acknowledged the pushback and sought to find consensus—and to bring the private sector on board.
He made a commitment to bring stakeholders together to find agreement in respect of the National Health Insurance Act, acknowledging that the resources and capabilities of both the public and private sectors are necessary to meet the health care needs of all South Africans equitably.
Cas Coovadia, chief executive of Business Unity South Africa (BUSA), said that this is a welcome change in tone from the president, even if it has come after the NHI Act was pushed through government in an unworkable state.
“The NHI Act in its current form is unaffordable, unsustainable and creates material risk for the country and taxpayers. We believe a collaborative approach is crucial in advancing our nation’s healthcare objectives, and our collective vision for universal health coverage in particular,” he said.
“We look forward to engaging with the Government on the NHI and other health-related matters, and will be urgently seeking a meeting with the Minister of Health.”
Groups like BUSA, along with civil organisations, unions, professional bodies and legal experts, have been poking holes in the NHI laws from all angles. Chief among the issues are questions of constitutionality (raised by parliament’s legal services), capacity, governance and affordability.
Regarding affordability, Cavoodia noted that the department’s estimate that it would need to raise R200 billion from taxes appears to be based on cost estimates that have not been updated since 2010.
The Act refers to this being raised from personal income taxes and payroll taxes, which is unrealistic and has broad economic ramifications.
“In addition, there are other substantive flaws in the Act that will negatively impact our fragile economy, impede investor confidence, not only in the healthcare sector but more broadly, and which raise serious governance risks,” he said.
“It is clear that the NHI Act needs to be amended to ensure that the country is able to deliver healthcare reform and advance universal health coverage without damaging the economy and the existing skills, innovation, resources and experience that reside in the private healthcare sector.
“The country should be leveraging these resources to help design and support a system that is fit for purpose and that is able to benefit future generations,” he said.
The BUSA lead said that businesses remain open to engaging with the government on the NHI, acknowledging the broad agreement that both the public and private sectors need to meet the healthcare needs of all South Africans equally.
According to Momentum Health Solutions and political lobbyist Ehicore, the seventh administration cannot reverse the status of the NHI Act now, and Ramaphosa is unable to return it to parliament.
There are very limited options available to reduce the potential damage caused by the laws and impact its implementation.
- An agreement on a phased approach and only promulgating certain clauses in the Act at differentiated times are subject to consultation between the President, Minister of Finance, and Minister of Health, primarily on budget, resources, and capacity.
- The executive or parliament introduces an amendment to the NHI Act.
- Multiple litigious actions result in an outcome, forcing the Department to review and amend the Act to address the concerns in a court ruling, and thus, the Act cannot be implemented in its current state.
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