Another call for president to send NHI Bill back to parliament instead of signing it

Although the president is looking for a pen to sign the NHI Bill into law before the election, there has been another call for him to send the Bill back to parliament instead of signing it. The National Assembly as well as the National Council of Provinces passed the NHI Bill without any changes, although there has been considerable input from experts.

Khulekani Mathe, CEO designate for Business Unity South Africa (BUSA), says as the election draws closer, to achieve a fair and sustainable healthcare system, it is crucial that we establish a system that will benefit present as well as future generations.

“Any healthcare system we adopt for our country must be affordable, feasible, sustainable and resistant to corruption. Furthermore, it is essential for the healthcare system to be in line with our Constitution. This is a long-term investment for our country that must be prioritised over short-term political ambitions.”

He points out that the National Health Insurance (NHI) Bill in its current form, which is on the president’s desk for consideration, is unfortunately not consistent with building long-term sustainability and access. “It is deeply troubling that a vast number of concerned stakeholders have repeatedly raised these concerns throughout the legislative process.

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Concerns and recommendations about NHI Bill ignored

“It is regrettable, not only for this Bill, but for the country itself, that their cautions and proposals were disregarded without proper consideration. The South African Health Professionals Collaboration, a group of 25 000 public and private healthcare doctors, dentists, specialists and allied healthcare workers also believes its members’ concerns and recommendations throughout the parliamentary process were dismissed, raising serious questions about the fairness and effectiveness of the democratic process.” 

Most recently, the Public Servants Association (PSA) also raised its own concerns, cautioning that significant issues must be addressed to ensure the NHI’s success and to mitigate negative consequences, he points out.

“It was particularly concerned that the transition to the NHI may result in public servants losing out on the medical-aid subsidy they currently receive through the Government Employees Medical Scheme (GEMS). This could place an undue financial burden on public servants and their families, particularly if they are required to contribute to the NHI fund while receiving reduced remuneration benefits.”

Mathe says this not only affects public sector employees, but every citizen who has a medical aid subsidy as part of their employment benefit package, as well as those benefiting from medical scheme tax credits that reduce their personal income tax burden.

ALSO READ: 25 000 doctors also ask president to send NHI Bill back to parliament

This is how government wants to finance NHI

Government intends to eliminate this benefit to finance the NHI and should be a cause for concern for all employers and employees who access these benefits, he says.

“The reality is that all medical scheme members, whether they work in the public or private sectors, invested their own after-tax income to secure their and their families’ healthcare needs. Redistribution and cross subsidies are important principles in our highly unequal society, but this must be carefully constructed to ensure long-term sustainable access to healthcare, which is both a social and economic imperative.”

According to the current version of the NHI Bill, government says it will divert money currently paid in medical scheme contributions in the private sector to the public sector. But Mathe says this money does not belong to the state, but to private citizens. The only way for government to divert this money is by imposing a heavy tax burden on its citizens.

“The financial risks to the country and taxpayers are substantial. The department of health has not yet defined the package of benefits that the NHI will offer and therefore the true costs are unknown. However, the national department of health has indicated that it will need to raise an additional R200 billion each year to supplement the current national health budget.”

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More taxes to fund NHI

According to the 2017 White Paper on the NHI, this will come from a combination of increases in VAT, payroll and personal income taxes. Mathe says to raise an extra R200 billion per year, government will have to increase VAT from 15% to 21%, or raise personal tax by 31%, or levy a payroll tax that is 10 times higher than the current UIF contribution, or a combination of these.

“Raising income tax by a third is simply unaffordable for a declining tax base which is already under enormous financial strain and raises significant economic risks for the country overall, with knock-on effects which do not seem to have been given due consideration to date.”

Mathe says even if government were able to raise this money, it would mean that the package of services that citizens can access through the NHI would still be extremely limited. He says for instance, if the NHI package of benefits is only available in the NHI Fund once it is fully implemented, those currently on medical aids will only have access to less than one-third of the benefits that they currently access through their medical aids.

“This will be the case even allowing for more efficient purchasing mechanisms. This is akin to asking someone who currently pays R100 to receive 100% of the benefits to continue paying R100, but only receive 30% of the benefits.”

According to Mathe this leaves medical scheme members with the challenge of having to find additional funding in their already-stretched household budgets to preserve access to existing benefits. “Clearly, this is an unsustainable situation, which is also constitutionally unsound.”

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NHI Bill expected to face considerable legal challenges if president signs it

He says given that none of the concerns raised by affected parties and stakeholders were taken into account and that there are so many challenges with the NHI Bill, including its unaffordability, the lack of detail and clarity including the scope of benefits and that it contains fundamental constitutional breaches, the NHI Bill is likely to face significant legal challenges if the president signs it.

“This will further delay the country’s ability to advance universal health coverage, undermining much-needed healthcare reform, which is critical for driving economic growth.”

Mathe says the majority of stakeholders, including BUSA and B4SA, support universal health coverage but believe that certain sections of the NHI Bill must be amended to ensure that it has a chance of success.

“Section 33 of the NHI Bill, for example, limits the participation of the private healthcare sector by stating that medical aids will not be able to cover any healthcare service that the NHI covers once it is fully implemented.” 

Restricting the participation of medical schemes in financing healthcare services creates uncertainty for the broader private healthcare and business sectors, stifling innovation and much-needed investment in our healthcare system and economy.

“Our strong recommendation, given the myriad of challenges, but also the opportunities, is for the president to send the NHI Bill back to parliament so that it can be properly reconfigured for its ultimate success. Shortcuts in the legislative process for short-term political gains are in nobody’s interest. It undermines citizens and the country at large and will inevitably lead to broken promises and a further erosion of citizens’ trust in their government’s ability to implement sound policy.”