SA braces for impact of NHI as many questions still need to be answered

South Africans are on edge in anticipation of how the National Health Insurance (NHI) Bill will affect the current balance of SA’s public and private healthcare system.

Earlier this month, the National Assembly passed the National Health Insurance (NHI) Bill.

While a few private health care institutions are in support of NHI, many are sceptical about the implementation of it – given the South African government’s reputation with handling funds and its shortcomings in ensuring efficient and timeous public administration.

But there is no doubt that a change up in SA’s healthcare system is necessary.

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According to the World Health Organisation, currently only financially stable South Africans are able to afford efficiently functioning healthcare (i.e private health care), while the poor have to rely on the under-resourced public sector.

This, world health experts have argued, is a violation of Section 27 of South Africa’s constitution which stipulates the state’s obligation to provide proper healthcare services for all citizens.

The South African government therefore has no choice but to address this shortcoming.

But, it is not doing so by focusing on addressing corruption and maladministration within the public health sector.

Instead, the government is throwing its weight behind the implementation of the NHI.

The Department of Health describes the NHI as a health financing system designed to pool funds to provide access to quality affordable personal health services for all South Africans, irrespective of their socio-economic status.

How does it work?

Basically, the government has a huge pool of funds, and every time a South African citizen needs a health service, they apply for their NHI cover to pay for it. The NHI cover will pay for it whether the healthcare service is administered in a public or private facility.

Where does this ‘pool of funds’ come from?

The NHI will be funded by tax credits and citizen contributions. If the government determines that you can afford it, you will likely have to pay towards your NHI access yourself – similar to how you pay tax. If you can’t afford it, your contribution will come from businesses and individuals who contribute towards it specifically for tax credits.

In simple terms, tax credits are like special coupons that the government gives to people or businesses to reduce the amount of money they have to pay as taxes in their official capacity. In order to attain this ‘coupon’, they contribute a fee towards the NHI fund.

Who benefits from NHI?

Everyone, if it is used right. The rich or financially stable who are financially contributing to their NHI access and the poor who are deemed not financially capable of contributing to their NHI access both have access to the same medical preventive, promotive, curative and rehabilitative healthcare services across both public and private healthcare facilities, which the government will now pay for from the fund.

Other health services will still need to be covered by medical aid or can be accessed at the ‘below-par’ public facilities for free.

What happens to medical aid?

The Department of Health says that private medical schemes will continue to exist, but their role will change.

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“When the NHI is fully implemented, private medical schemes will provide cover for certain services that the NHI fund does not cover. Medical schemes are voluntary organisation and they will remain as such,” the department said. In essence, medical schemes will not be able to provide cover for services that are paid for by the NHI.

Questions still need to be answered

South Africans are not entirely convinced that the NHI is going to work. They still want to know how much it will cost those who will be expected to pay for it. With the repo rate increases putting immense strain on the middle income sector of society, an additional ‘tax’ may financially cripple those who are just getting by.

There are fears the extra demand on private healthcare facilities will erode the quality of services in the sector, thereby crippling it for all South Africans. No studies have been done as yet to determine whether private health facilities have the capacity to accommodate the redirected traffic from the strained public health facilities.

There is little to no data around the number of individuals by which the public sector is being strained by. There is also no indication of the number of individuals that the private health sector can accommodate.

South Africans also want to know how long government will take to authorise applications for health cover. They’ve been scarred by the turn-around times from other governmental departments like Sassa, Home Affairs and the drivers licencing department. Some health issues can’t wait for administrative backlogs to clear.

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Another question is what impact the restriction on services offered by medical aid schemes will have on the income generated within the industry? Obviously, the insurance industry which provides employment for over 100 000 South Africans is about to take a knock. Can we really afford to experience job losses?

Probably the biggest concern for South Africans is whether government will handle the NHI funds responsibly and not squander and loot it as has been seen in many governmental projects before. We saw what happened to the R500 billion for the Covid-19 relief fund.