News Room

Taxpayers To Fund The NHI

Author: Jason Snyman
Date: 2019-08-09
The revised National Health Insurance (NHI) Bill has been released, answering a few of South Africa's questions. How will it be funded? How will it be implemented? And what will become of medical aids? The answers, however, may prove a jagged pill to swallow.

Earlier this week, the Department of Health released its revised National Health Insurance (NHI) Bill, which has been mired in controversy since its inception. 

The NHI aims to bring universal health coverage to every South African – which we can all agree would be a phenomenal achievement – but since proposed, the government has been largely unable to answer some very important questions. 

For instance: how will it be funded? What kind of medical problems will be covered? How will private medical aid users be affected?

The government’s lack of clarity surrounding the project – resorting instead to unintelligible rambling when probed – has done little to allay South African concerns. 

Back in July, our Minister of Health, Dr Zweli Mkhize, said that the department would deal with the problems as and when they occurred, and that the NHI would be introduced ‘whether you like it or not.’

Not particularly soothing, then. 

You’ll be happy to know that the revised Bill, published on 8 August, answers at least a couple of our questions. The answers, however, may prove a jagged pill to swallow.

Who Will Be Covered Under NHI?

All South African citizens, permanent residents, refugees, inmates and certain groups of individual foreigners will be fully covered under NHI, while asylum seekers and illegal foreigners will only be entitled to emergency medical services and services in cases of ‘notifiable conditions of public health concern’ – such as Ebola, for instance. 

All children, however, including those of asylum seekers or illegal foreigners, will be entitled to basic health care services, in line with the constitution. 

Anybody seeking health care services – from accredited health care providers or health establishments – must be registered with the NHI, and able to provide proof of this registration. Registration will reportedly be free – carried out any accredited health care provider or health establishment – and without it, you will not be able to receive the health care services that you’re entitled to. 

Therefore, registration is not optional – it is mandatory. Children will be considered registered from birth.

Even providers, such as doctors, nurses, specialists, pharmacies, hospitals and clinics will have to register. They will have to be accredited to provide health care and, pass standards set by the Office of Health Standards Compliance (OHSC). 

As far as which medical services will be covered, the Bill does not specify, but does state that all users will ‘receive necessary quality health care services free at the point of care from an accredited health care provider or health establishment upon proof of registration with the NHI fund’.

How Will The NHI Be Funded?

The Treasury has previously estimated that the cost of the NHI will run up to as much as R256 billion. This figure is sure to change after the publication of the revised Bill, and as yet, we have no idea how much this is really going to cost, or how exactly it will be funded.

So far, we know that a single fund will be created to buy all healthcare provisions, medicines and supplies, as well as pay doctors and hospital staff. 

South African taxpayers will be paying for a portion of the NHI – so much has now been made clear – via an increase in certain taxes and reallocation of other existing taxes. 

So! Funding for the NHI will be collected ‘in accordance with social solidarity’ through a number of direct and indirect taxes, which include:

• General tax revenue;

• Payroll tax (employer and employee);

• The reallocation of funding for medical aid tax credits, which are paid to people on medical aid. These people will no longer receive these tax credits, and it will all be paid into the NHI Fund instead. 

• An increase on personal income tax, introduced through a money Bill by the Minister of Finance.

Provincial funds for healthcare will also be moved into a single fund – since some provinces actually do their jobs to make sure that things run smoothly, and others couldn’t be bothered. 

According to the Bill: 

Once appropriated, the revenue allocated to the fund must be paid through a budget vote to the fund as determined by agreement between the fund and the minister and subject to the provisions of the Constitution and the Public Finance Management Act.

What Will Happen To Medical Aid?

People will still be allowed to have medical aid, but it will only be for services that are not covered by the fund – complimentary cover. We don’t know which services will be covered by NHI yet, and which will be excluded, but we do know that patients who require additional care – not funded by the NHI – will be referred to specialists. 

Patients will be required to see NHI GPs for an assessment first, however, and will not be permitted to go directly to any specialist, no matter the ailment. 

Anybody who does not qualify for NHI, such as illegal immigrants, will have to have medical aid to receive any health care. 

The overall sentiment among healthcare professionals toward the NHI has been overwhelmingly negative. According to a report published by Solidarity, there are very real concerns that the introduction of the NHI will lead to the mass exodus of qualified doctors from the country.

These highly-experienced private doctors will no longer be able to charge their own fees for their services, and will no longer be able to earn an appropriate livelihood. They will seek opportunities abroad, and deepen our already-critical shortage of medical professionals.  

There are also concerns that, due to the lack of information around the scheme, and the lack of confidence in the government, that the NHI will completely destabilize healthcare in the country. Private hospitals will become public hospitals, public hospitals will fall apart the way they always have, and your medical aid will be worth almost nothing at all. You will not be permitted to seek alternative healthcare, even if you’re fortunate enough to afford it. 

Medical aid will gradually be phased out, until it ceases to exist. 

These are legitimate concerns. 

There is no actual starting date for the NHI. The system will be implemented in phases, the first of which is set to begin in September 2019. By the end of 2026, it is expected that every South African will be registered and making use of the NHI, with medical aid playing a very silent second fiddle. 

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