May 28, 2024

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South Africa’s National Health Insurance Bill: Why it’s controversial

South Africa’s National Health Insurance Bill: Why it’s controversial

  • author, Farouk Gothia
  • Role, BBC News, Johannesburg

South African President Cyril Ramaphosa has approved a controversial new law that will bring about the biggest change in the health sector since the end of apartheid 30 years ago.

It promises universal healthcare for all, but has faced fierce resistance from the main opposition Democratic Alliance, which has accused the president of signing South Africa’s healthcare “death warrant”.

He warns that the scheme could be expensive and lead to corruption.

What is the opinion of the law?

The National Health Insurance (NHI) scheme calls for the establishment of a government fund to cover the medical costs of all South Africans – most of whom are currently not covered.

The matter goes further to prevent people from obtaining private health insurance for treatment paid for by the Fund, which is very controversial.

“Once a benefit is covered by the National Health Insurance Fund, medical schemes will no longer cover the same benefit,” the government says.

This is in contrast to countries such as the United Kingdom, which has a state-funded National Health Service (NHS), but where people are free to obtain medical insurance to receive any treatment they want from private doctors and hospitals.

Once the National Health Insurance Scheme is fully implemented, “the role of medical schemes will change as they will provide coverage for services that cannot be reimbursed by the National Health Insurance Fund,” the report says.

In a post on X, formerly TwitterThe government says everyone will be able to “access NHI-contracted GPs, clinics or hospitals closest to them, whether in the public or private sectors”.

The government has not specified which treatments private hospitals and NHI-accredited GPs will have to provide, but says they will include emergency services, mental health services, palliative care and rehabilitation services.

Why did the government introduce this scheme?

Mr Ramaphosa says national health insurance is “an important tool to address poverty”.

“The high cost of health care makes families poorer,” he adds. “By contrast, health care provided through National Health Insurance frees up resources for poor families to meet other basic needs. National Health Insurance will make health care in the country as a whole more affordable.” . in comments posted to X after he signed the bill into law.

The scheme is seen as an attempt to boost the chances of the ruling African National Congress in the May 29 elections at a time when opinion polls indicate that the party may lose its absolute majority for the first time in 30 years.

During the election campaign, Ramaphosa made national health insurance one of his key pledges to voters.

“We will end the segregation that still exists in health care, with the best health care for the rich and the best health care for the poor,” he said at a rally last month.

The centre-right DA has come out strongly against national health insurance in an attempt to rally its voters.

In a statement on Tuesday, Democratic Party leader John Steenhuisen said the scheme would lead to “massive tax increases” with the money deposited “into a central fund controlled by a great ANC cadre”.

How will the National Health Insurance be paid for?

The parliamentary website identifies three main sources of funding:

  • General taxes
  • Contributions from people who earn more than a specified amount (not specified) and
  • Monthly contributions made by employees to the fund.

The government did not clarify how much people would have to contribute or how much would be required to fund national health insurance.

However, the explanation on the parliamentary website says that “the cost of our healthcare system, currently the most expensive in the world, will fall.”

“When people visit health care facilities, no fees will be charged because the National Health Insurance Fund will cover the costs of people’s medical care in the same way that it covers medical aid for its members,” the document states.

The DA takes a different view, accusing the government of wanting to tax South Africans to death.

She says the scheme will cost “in excess of R200 billion [$10bn; £8.6bn] Annually – with some estimates as high as R1 trillion.”

So what happens next?

The DA says it will take legal action to try to stop the scheme.

She says she supports universal healthcare, but national health insurance “would destroy South Africa’s private healthcare system and thus sabotage any chance of reforming our public health system”.

“Just this week, nine healthcare associations, representing 25,000 healthcare professionals, declared national health insurance unviable,” Steenhausen wrote in an article published on News24.

The government is likely to face an “avalanche” of lawsuits, including from the Medical Association of South Africa, Daily Maverick reported.

Critics say this is unconstitutional – a view the government rejects, arguing that it is in fact fulfilling its constitutional obligation to provide equal health services to all – rich and poor.

The opposing sides are likely to battle it out in front of South Africa’s highest court, which will have the final say on whether the legislation can be implemented or not.

Even if the Constitutional Court gives the green light, the scheme will likely be introduced gradually over many years – especially since the government will first have to come up with the money to finance it.

This will be a difficult task because South Africa is in a deep financial crisis, and the government is struggling to provide existing public services – including electricity and water, not only for businesses and homes, but even for some government hospitals.

How many South Africans rely on private and public healthcare?

The government says about 14% of the population has access to private medical care, but its costs are rising without “significant improvement in health outcomes.”

The remaining 86% of the population cannot pay for medical assistance and rely on government clinics and hospitals, which the government admits are “overburdened.”

So it came up with a scheme where rich and poor get healthcare without a GP or private hospital demanding payment first – which is what currently happens even if a patient needs emergency treatment for a life-threatening condition.

Private hospitals’ fears are that the government’s scheme will leave them overwhelmed with patients, with no guarantee they will receive payments from what could be a poorly managed National Health Insurance Fund.

More on the 2024 South African elections:

Image source, Getty Images/BBC