Simeka Health frequently asked questions on National Health Insurance (NHI)
What is NHI?
Definition in the White Paper:
National Health Insurance (NHI) is a healthcare financing system that is designed to pool funds to actively purchase and provide access to quality, affordable personal healthcare services for all South Africans based on their health needs, irrespective of their socio-economic status.
The aim is to ensure that all South Africans have access to necessary quality healthcare and are protected from the financial burdens of medical costs.
How will NHI be funded?
It is not clear yet what the funding model for NHI will look like. The NHI Act (Section 49) stipulates that its main source of income will be money appropriated by Parliament.
The money should come from:
a) General tax revenue;
b) Money used to fund medical scheme tax credits (in other words medical scheme tax credits will be taken away from taxpayers);
c) Payroll tax; and
d) A surcharge on personal income tax.
This will require a Money Bill to be introduced in Parliament by the Minister of Finance before any specific taxes can be collected for NHI.
Will the medical scheme tax credits be removed now that the NHI act is law?
No, not immediately. Only Parliament (on recommendation of the Minister of Finance and the National Treasury) can amend or remove the medical scheme tax credits. It is not expected that this will happen soon.
Medical scheme tax credits reduce the amount of tax payable by individual medical scheme members. If you are a member of a medical scheme, you can apply the tax credit to reduce the amount of tax you pay. The removal or reduction of medical scheme tax credits will increase the tax burden for medical scheme members and may impact their ability to afford private cover, thereby increasing the burden on the public health sector.
What does the signing of the bill mean?
It means that the NHI Bill is now law, i.e., it is now an Act. However, it has not been implemented yet and is, therefore, not enforceable.
NHI is likely to be rolled out in a phased approach. This means that different dates will be stipulated to bring different provisions of the Act into operation.
There are still various structures that must be established to manage NHI, such as the NHI Fund and its Board. In addition, major healthcare reform must take place, such as the shifting of funds from provinces to the national level, before NHI can be rolled out. Furthermore, several other laws will require amendment to accommodate the new legislative landscape created by the NHI Act.
The timeline for full implementation of the NHI Act is not known.
Will the signing of the Bill have any immediate impact on medical schemes?
No, it will not. It is important to note that for the foreseeable future, medical schemes, private health insurance, and the private healthcare sector will operate as usual.
Put simply, medical scheme members and healthcare providers throughout the system will not experience any short-term impact. Medical schemes will only be impacted once NHI has been fully implemented. It is anticipated that this will take a long time. Several stakeholders are also challenging the constitutionality of this provision in court. The outcome of the court cases might impact the provision pertaining to medical schemes in the NHI Act.
Should I cancel my medical scheme?
No, you should not. It is expected that the full implementation of NHI will take a long time, which means that medical schemes will continue to exist and function as normal.
It is important to bear in mind that healthcare needs are often unexpected and can involve exceptionally large expenses. Therefore, cancelling your medical scheme is a serious risk to you and your family’s physical, mental, and financial wellbeing. The need for access to quality care will continue to exist. Medical scheme and private health insurance cover assists in making healthcare services affordable.
What is the role of medical schemes once NHI is implemented and what benefits will NHI provide?
Medical schemes will continue to exist alongside NHI, offering “complementary cover”.
The NHI Act 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. It is also not yet known what services NHI will cover. This position may also change as medical schemes are currently challenging the constitutionality of these provisions in court.
How much will NHI cost the government annually?
The Government has not provided any details pertaining to the cost of NHI. Several stakeholders have tried to quantify the sum of money the Government will need to implement NHI. However, the input of the National Treasury is required to come to a credible amount, which is still lacking. It is, therefore, not possible to provide an accurate costing of NHI at present.
Who will be covered?
Persons who will be able to access healthcare services under NHI are the following:
• South African citizens;
• Permanent residents;
• Refugees;
• Inmates; and
• Certain categories or individuals’ foreigners as determined by the Minister of Home Affairs. (The beneficiary pool in the NHI Act is, however, much broader.)
All children, including children of asylum seekers or illegal foreigners, will be entitled to basic healthcare services. Asylum seekers, illegal foreigners and foreign visitors without travel insurance will have access to treatment for emergencies and notifiable conditions that present public health concerns.
Does NHI mean that everyone can go to private hospitals and doctors in future?
NHI healthcare services will be provided by contracted public and private healthcare providers.
Private healthcare providers, including doctors and hospitals, will voluntarily contract with the NHI Fund to provide NHI services. Everyone (all users of NHI services) will register with a contracted primary care provider (public or private) of choice. When a person requires care, he/she will access the NHI services at his/her primary care provider. Primary care providers will refer patients to specialists and hospitals following stipulated referral pathways for further care.
What constitutional challenges can we expect against NHI?
The constitutional challenges, amongst others, are related to the intended removal of medical schemes’ rights to provide cover that is already provided for under NHI benefits.
Other constitutional issues that could be raised include the right to choose one’s profession, the right to associate freely and not be compelled to obtain healthcare services through the NHI Fund, and the removal or limitation of existing rights (i.e., to purchase comprehensive cover from medical schemes with after-tax money).
What other countries have implemented the NHI and what have we learnt from these?
Universal health insurance, also known as universal healthcare or national health insurance, has been implemented successfully in several countries around the world. One of these include Ghana, whose healthcare system is advancing towards universal health coverage.
Ghana’s National Health Insurance Scheme (NHIS), was established in 2003. In 2015, the out-of-pocket expenditures on healthcare decreased to 26.8%. These savings have been realised through the NHIS, since its launch in 2004. The NHIS package provides coverage for approximately 95% of the most common causes of illness in Ghana, and includes inpatient and outpatient care, comprehensive maternity care, diagnostic testing, generic medicines and emergency care.
NHI has proven to be an effective mechanism for achieving positive outcomes in various countries, such as Thailand, Ghana and Indonesia. These nations have successfully implemented comprehensive healthcare systems that provide coverage to their populations, resulting in improved access to essential medical services, reduced financial burden on individuals, and better health outcomes overall.
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