Discovery clarifies what the new NHI means for medical aid members in South Africa

Discovery chief executive officer Adrian Gore has sent out a notice to all Discovery medical aid members clarifying what the signing of the National Health Insurance (NHI) into law means for the group, and South Africans worried about their healthcare.

Gore said that medical aid members need not panic, noting that medical scheme cover and benefits will not be affected by the new laws “for a long time to come.”

“We understand that President Ramaphosa’s signing of the NHI Act has caused anxiety. However, with full implementation a long way out and many matters still to be navigated, I urge you to focus on the facts. Rest assured that we will do the right thing for you, the healthcare system and for all South Africans,” he said.

Medical aid panic

The main cause of anxiety among South Africans stems from the way the new laws deal with medical aids, raising questions on what will happen to benefits, and whether or not medical aids will need to be cancelled.

The panic arises from a key component of the new Act – Section 33 – which Gore said is “problematic”.

Section 33 states that once NHI is ‘fully implemented’ medical schemes will be able to cover only those services that are not covered by NHI. This implies that medical scheme cover will be replaced by the NHI at that point in time.

However, the Discovery chief said that, while this appears threatening, there are two key reasons why medical aid members shouldn’t worry just yet.

“First, the impact of Section 33 is that only once the NHI is ‘fully implemented’ will medical schemes be limited in the cover they provide to medical scheme members. Until this point, there will be no change to your medical scheme cover. We believe it will take a long time – a decade at least – to achieve ‘full implementation’ given the scale and complexity of reforms needed,” he said.

“Bear in mind the NHI is an inordinately large and complex initiative that proposes extraordinary change and restructure to public and private healthcare systems. This is unprecedented and will be incredibly difficult to achieve.”

The second reason is that, even when the NHI is ‘fully implemented’, medical schemes will still be able to provide cover for benefits not covered by the NHI.

“This is important because the NHI is unlikely to have sufficient funding to provide an extensive package of benefits. This is because our country unfortunately faces significant financial constraints linked to low economic growth and a very narrow tax base. Medical schemes will therefore still play a significant role post full implementation of the NHI,” Gore said.

Unfortunately, however, this means it is even more likely that South Africans will be triple taxed for adequate healthcare in South Africa: paying income tax and VAT; paying NHI surcharges and payroll taxes; and then needing to pay the medical aid “grudge tax” to get comprehensive coverage.

The NHI will be challenged

Gore said that the NHI Act remains problematic and unworkable and will be legally challenged.

Several groups, including the Democratic Alliance, union Solidarity and its affiliates, as well as various business groups and healthcare representative bodies have launched or are considering launching legal challenges against the laws.

Gore said that Discovery will also take the necessary action as required.

“The NHI will only be workable if it provides universal access to care for all South Africans, while not restricting the rights of medical scheme members. To achieve this requires collaboration between the public and private healthcare sectors, which the Act fails to facilitate on a sustainable basis,” Gore said.

“To achieve sustainability, we need more sources of funding for healthcare, not less. We need more doctors and healthcare professionals and resources, not less.

“Importantly, a workable NHI requires the public sector to be strengthened, not the private sector to be weakened. We need both to be strong and working together effectively.”

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