What you need to know about SA’s medical aid schemes and NHI

Despite the promise of universal health coverage for everyone, the signing of the  National Health Insurance (NHI) Bill just before the election brought with it several misconceptions about medical schemes that undermine the very foundation of our healthcare system.

“In a historic move aimed at transforming the South African healthcare landscape, the president signed the NHI Bill into law. This landmark decision promises to move South Africa towards universal health coverage for all citizens, regardless of socio-economic status,” Dr Katlego Mothudi, managing director at the Board of Healthcare Funders (BHF), says in a statement.

While the goal of universal health coverage is commendable, the rhetoric leading up to the NHI Act’s announcement created misconceptions about the role of medical schemes, Mothudi says. “Many people believed that they should cancel their memberships immediately to enjoy free health services for the foreseeable future although the implementation of NHI will take several years.”

The NHI Act introduces a single-payer system and central to the idea is that healthcare is a ‘public good’, suggesting all healthcare funding should exclude medical schemes and should be government-funded.

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Healthcare is a social good, not a public good

However, Mothudi argues, that healthcare is more accurately described as a social good. “A public good, like military services, is one that the government must provide and from which no one can be excluded, regardless of payment. While healthcare is essential, it is not feasible to provide it as a public good.”

He says the BHF is concerned about the numerous misconceptions propagated by government representatives since 2009 and commissioned professor Alex van den Heever, Chair of Social Security Systems Administration and Management Studies at Wits Health Consortium, to investigate these claims.

“Despite their hyperbolic nature and lack of systematic research, these statements carry significant weight due to their endorsement by influential individuals. Prof. van den Heever’s report identified frequently repeated assertions that he concluded were unsubstantiated and untrue.”

Key findings from the report include:

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Medical schemes are unsustainable – False

In 2009, claims suggested that many medical schemes were headed for collapse due to unsustainable financing models, with 18 schemes reportedly nearing insolvency. Professor Van den Heever’s report refutes this, showing stability in medical schemes from 2005 to 2022.

The number of beneficiaries increased by over one million from 2009 to 2022, with consolidated reserves of R114 billion in 2022, far exceeding the required 25% reserve ratio. Broker costs have not been a systemic concern and total non-health costs per average beneficiary per month for all medical schemes decreased by 34.7% in real terms from 2005 to 2020.

Health services are a public good – False

In 2011, minister of health Aaron Motsoaledi claimed that private healthcare was a “brutal system” due to commercialisation. However, Professor Van den Heever clarified that healthcare is not a public good in the economic sense, as it does not meet the criteria of being jointly consumed without exclusion. Healthcare is a crucial service but providing it as a public good is not feasible.

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Most medical scheme beneficiaries are white – False

Last year, Professor Olive Shisana, an honorary professor at the University of Cape Town and special advisor to President Ramaphosa, stated that the private sector predominantly serves the privileged white population.

However, Statistics South Africa’s 2021 research indicates that of the total population using private healthcare services, 50.2% are black African, 32.3% are white, 9.8% are coloured and 7.6% are Indian or Asian.

Need for balanced perspectives

While the BHF supports healthcare reform, it raises concerns about the NHI Act’s constitutionality and calls for a factual review of claims about medical schemes, Mothudi says.

“It is crucial to present both sides of the debate to understand the implications fully. Including government perspectives and addressing how the NHI will affect individual citizens would provide a more comprehensive view.”

Mothudi says medical schemes remain a valuable national asset that plays a crucial role in ensuring the long-term viability of South Africa’s healthcare ecosystem. “BHF advocates for a balanced approach to healthcare reform that considers both public and private sectors’ strengths and weaknesses.”