Understanding the National Health Insurance (NHI) Bill


Much debate has taken place around the proposed National Health Insurance Bill (NHI). Discovery’s overall position on NHI is unequivocal. We would like to provide some additional information to answer any questions you may have.

We are supportive of structural change that assists in strengthening and improving the healthcare system for all South Africans, and we are committed to assisting where we can in building it, and making it workable and sustainable, seeking to ultimately strengthen both the public and private healthcare systems for all South Africans. While the NHI is a huge, complex and multi-decade initiative and a considerable amount of debate and effort will be required to make it workable, in this brief note, we review some of the key issues arising from the NHI Bill and then look at the NHI policy process going forward.

The role of medical schemes once the NHI is implemented

A central issue is the future role of private healthcare and medical schemes once the NHI is implemented. The NHI Bill states that when the NHI is ‘fully implemented”, medical schemes will not be able to provide cover for services that are paid for by the NHI.

Our strong view is that limiting the role of medical schemes would be counterproductive to the NHI because there are simply insufficient resources to meet the needs of all South Africans. Limiting people from purchasing the medical scheme coverage they seek will seriously curtail the healthcare they expect and demand. It poses the risks of eroding sentiment, and of denuding the country of critically needed skills, and is impacting negatively on local and international investor sentiment and business confidence. Crucially, by preventing those who can afford it from using their medical scheme cover, and forcing them into the NHI system, this approach will also have the effect of increasing the burden on the NHI and will drain the very resources that must be used for people in most need.

We also believe that limiting the rights of citizens to purchase additional health insurance, after they have contributed to the NHI, would be globally unprecedented and inappropriate. In virtually every other country with some form of NHI, citizens are free to purchase additional private health insurance cover, including cover that overlaps with services covered by the national system. A restriction on choice of medical scheme cover is not dissimilar to limiting the rights of citizens to purchase private education for their children or private security, on the basis that the public system already provides state schooling and security services.

Given the substantial harms that this approach of limiting the role of medical schemes will cause, it must surely be strongly justified for good policy reasons. However, we are not aware of any sound policy reason or justification that has been put forward for this approach. We believe that medical schemes will continue to cover all of the healthcare services which they currently cover for the foreseeable future for a number of reasons:

  • There is uncertainty as to when the NHI will be considered “fully implemented”, and this is most likely to be quite far in the future due to resource constraints.
  • There is no clear definition of services to be covered by the NHI, and it appears that this definition will be expanded on an incremental basis.
  • The Bill is open to interpretation. It states that medical schemes cannot cover services “reimbursable” by the NHI. At the same time, the Bill states that to obtain reimbursement, patients will have to follow the NHI’s ‘referral pathways’. If patients choose their own providers, they will not be able to claim from the NHI but will be able to claim from private health insurance. When read together, the Bill appears to accommodate medical schemes being able to fund any services that are not reimbursable by the NHI due to patients choosing not to use NHI pathways.

Discovery is already actively engaging with the Department of Health on this critical set of issues, alongside the broader business community, and we will continue to do so in order to ensure that medical schemes and private healthcare remains a critical part of the healthcare system, together with the NHI.

The financing of the NHI system

The Bill makes no reference to the likely costs of the NHI once fully implemented. Any fundamental change that improves quality and access and seeks to contract with private providers will require substantial additional funding. We understand that National Treasury will soon be publishing a costing document, and that this is likely to be based on an incremental approach to providing NHI benefits.

The Bill specifies that payroll taxes and a surcharge on personal income tax could be considered as sources. Such taxes would need to be determined by National Treasury. At the presentation of the Bill, the Minister of Health indicated that no tax changes are envisaged over the 3 year period of the current Medium Term Expenditure Framework.

In our view, there are material challenges to raising new revenues to supplement the current government budget for healthcare, and this is unlikely to change in the foreseeable future. This suggests that the rollout of the NHI will be slow unless there is a substantial improvement in the country’s economic prospects.

The role of private hospitals and health professionals

The Bill envisages that the NHI Fund will contract on a voluntary basis with private hospitals and health professionals to supplement the current public sector delivery system.

For the foreseeable future, we expect that the NHI will contract with some GPs to supplement primary care services, and also that it will contract for certain high priority services to address specific gaps in public sector provision. If this is achieved, it will already be a significant step forward. Beyond that, we expect that the vast majority of NHI services will continue to be delivered by public sector clinics and hospitals, and that private hospitals, specialists and other providers will continue to be funded by medical schemes.

South Africa is blessed with a committed, highly skilled and world-class healthcare professional community. These professionals work hard, provide excellent care and are committed to our country. We will work hard to defend their rights to fair remuneration, to an optimal working environment that promotes sustainability and ideal patient care, and to retaining and supporting them within our broader healthcare system.

The NHI Bill Process

The NHI Bill has been tabled in Parliament and is now in the hands of the Portfolio Committee on Health, which will hold formal hearings in early 2020. Discovery is actively participating in a direct engagement process between Business Unity South Africa and the Department of Health to discuss a number of issues of common interest, including the NHI. There is also a parallel process within NEDLAC, offers further opportunities for business, labour and government to engage on the final content of the Bill. We expect the Bill to be finalized sometime during 2020 at the earliest.

Concluding remarks

While the NHI Bill certainly raises some serious concerns, we recognize the need for structural change to improve healthcare for all in SA. We believe this should leverage the strengths of the key elements of the current public and private healthcare systems, and we remain confident that the final outcome will be rational and workable. Discovery is committed to playing its role in building a positive future - for our members, South Africa’s healthcare professionals, and for all South Africans.

Frequently asked questions

The Discovery Health Medical Scheme is an independent non-profit entity governed by the Medical Schemes Act, and regulated by the Council for Medical Schemes. It is administered by a separate company, Discovery Health (Pty) Ltd, an authorised financial services provider and administrator of medical schemes. 

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