NHI in South Africa: How Will It Work?

South Africa is one step closer to rolling out free quality healthcare for all its citizens. That's the word from Health Minster Dr Aaron Motsaledi, who recently released the National Health Insurance (NHI) Bill for public comment.

Despite the government's best intentions, the bill appears to be big on ideas but light on practicalities. Key issues, like funding, what healthcare services will be covered, and precisely how the 56 plus million South Africans will have access to these services, have not been adequately addressed by the proposed legislation.

NHI: mandatory state-run medical aid

What we do know is that the NHI will take the form of a gigantic state-run medical aid that will purchase healthcare services, medicines and equipment from registered, certified and accredited service providers at set, negotiated tariffs.

All South Africans who have the ability to pay will be expected to contribute to the fund, whether they’re medical aid members or not. Although there’s no clarity as to how these funds will be collected, experts have speculated it will probably be in the form of payroll taxes, surcharges and/or an increase in VAT.

Private healthcare sector involvement

Apart from the cost implications, the question on everyone's lips is how does a poorly managed, under-resourced and chaotic public healthcare sector suddenly transform into a sleek well-oiled machine with the capabilities of providing quality healthcare for all?

One answer is that the private healthcare sector is going to be roped in. Private doctors, specialists and hospitals will have to sign up for duty, whether they like it or not.

This, of course, leads to another intractable problem; how do you convince private practitioners and facilities to deliver services to many more people at regulated tariffs that are much lower than they currently charge?

There are already reports of a mass exodus of highly trained and skilled doctors and the imminent closure of private hospitals; something the country can ill-afford.

How will NHI affect medical aid schemes?

The Minister has alluded to the fact that medical aid schemes will go through rigorous restructuring so that they better align with NHI. What we'll probably see is a smaller group of schemes offering fewer options with a reduced bouquet of benefits.

Although you will still be able to belong to a medical aid scheme, the benefits will only cover supplementary healthcare services not covered by NHI. You will, of course, have to pay medical aid premiums plus contribute to NHI.

This is the long-term plan for medical aid schemes in South Africa. Over the short-term, the minister has introduced a raft of proposals in the Medical Schemes Amendment Bill.

They include the abolition of co-payments, waiting periods and late joiner fees; DSP-based cost savings to be disbursed to members rather than being retained by schemes, and all plans to be approved by the Council for Medical Schemes on the basis they are strictly member-focussed.

Key takeaways of the National Health Insurance Bill

Under the NHI - which is only expected to be implemented by 2025 - you will be able to:

  • register with a private or public doctor of your choice, provided he or she is accredited and certified by the NHI
  • voluntarily opt to belong to a medical aid scheme that offers benefits for services not covered by the NHI
  • contribute to the NHI based on your income.

It’s likely that you’ll be able to get treatment in hospital or consult a specialist only on referral from your GP.

Stakeholders have three months in which to comment on proposals set out in the NHI Bill. We will, of course, keep you updated on any new developments.

At IFC, we offer informed, objective advice about South African medical aid schemes, and can assist you in joining the scheme that best suits your needs and budget. Contact us for more information or to discuss your needs.