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EXPLAINER

Everything you ever wanted to know about the NHI but were afraid to ask

Everything you ever wanted to know about the NHI but were afraid to ask
(Image: Quicknews / Wikipedia)

The National Health Insurance Bill signed by President Cyril Ramaphosa on Wednesday is a notoriously complex piece of legislation which few people have actually read. We break it down.

What is the NHI?

The most important thing to note is that it is not a health system (as per Britain’s National Health Service), but a fund – which the government will use to buy healthcare services for people from both the public and private sectors.

Who will run the NHI fund?

A board which will report to the minister of health. It will consist of no more than 11 people, the bill specifies, appointed by the minister. Board members may not be government employees, and cannot serve for longer than five years. A CEO will be appointed by the board, subject to the approval of the minister.

When the NHI kicks in, how much will I pay for healthcare?

Nothing. This is the idea, anyway. You will be able to walk into the nearest hospital, clinic or GP’s office that has a contract with the NHI fund and get treated for free. The first time you do so, you will have to register using your ID book or passport and have your fingerprints taken.

What about foreigners?

This has been one of the points of contention for civil society. All South African citizens, permanent residents and refugees will be covered, as will all children. But asylum seekers and illegal foreigners will only be covered for certain conditions and emergency care.

Where will the money for the NHI come from?

“Our taxes”, says a fact sheet from the Government Communication and Information System (GCIS). Many have pointed out that the South African tax base is very small

The country has 7.1 million registered taxpayers, but just three million pay 90% of personal income tax. Personal income tax is the “primary revenue source in South Africa’s fiscal system”, according to economist Andrew Donaldson.

The NHI means taxes will rise: GCIS says there will be a “surcharge” on income tax and a “payroll tax payable by employers and employees”.

What kind of health services will I be able to access?

“Comprehensive”, including palliative care and mental health services.

So is this the end of private healthcare in South Africa?

No, insists GCIS: “Contrary to some public narrative[s], the NHI is not going to abolish or do away with private health providers”. In fact, government maintains that the NHI will actually benefit private healthcare providers – because entering into contracts with the NHI Fund will give them a much larger pool of patients, and “they will be able to provide services to patients throughout the year, not worried about depletion of funds of patients at any stage”. That’s because the NHI Fund will settle the bill.

One thing that will be different, however, is that private healthcare providers will no longer be able to set their own fees in terms of the NHI contract. The NHI Fund will decide the fees – a prospect which doubtless strikes fear into the heart of many practice owners.

What about medical aid schemes?

They would seem to be in a world of trouble, which is why so many have immediately threatened court action. This is because medical aids will no longer be able to cover you for any service covered by the NHI Fund – which, government keeps maintaining, will cover almost everything. (This aspect of the legislation, Discovery has said, is globally unprecedented.)

You will still be able to be a member of a medical aid scheme, but the prospect does not seem very appealing. Medical aid schemes will be decimated financially since the fees they would be able to charge would presumably only be a fraction of the king’s ransom they can command now.

GCIS acknowledges that “some will be too small to survive, so they will consolidate with others to maintain a viable risk pool for the benefits that they may still cover”.

Can I opt out of the NHI, or opt out of making contributions to the NHI?

Nope.

How long will this all take to implement?

The smart money is on “literally decades” – if indeed it ever comes to fruition. Ferial Haffajee quotes one expert here as estimating 30 years. 

In theory, there are supposed to be two phases, with the first unrolling between 2023 and 2026 and the second ending in 2028.

The Department of Health’s NHI head Nicholas Crisp told Bhekisisa in 2023: “You won’t feel anything in the first year, nothing. [The system] won’t change in a short time; it will take a couple of years before we see the first steps.”

Health Minister Joe Phaahla said on Thursday that come 2028, anyone will be able to walk into any private health facility and be treated free of charge. This will almost certainly not be the case by then.

How do doctors feel about the NHI?

A number of industry bodies representing healthcare workers have indicated that they will litigate the matter. Some private-sector doctors interviewed by News24 said that they refused to work for the state and would emigrate if forced to do so.

Is anyone very positively disposed towards the NHI?

The ANC, obviously, and its allies in the trade union movement. The GOOD party released a statement supporting the signing of the bill but urging government to “iron out identified wrinkles”. 

Pretty much all other political parties have condemned it, with even the EFF terming it “misguided, disingenuous and opportunistic”.

Then again, it is peak election season – and the signing of this bill is a gift to the opposition as well as to the ANC.

Does nationalised healthcare ever work?

Yes. Please see Tim Cohen’s excellent (very NHI-sceptical) piece which includes a table laying out the comparative costs and outcomes for various national health systems across the world.

But can it work in South Africa? There is abundant reason to be doubtful – and not just because of the potential for corruption and mismanagement or the parlous existing state of the public health service.

Public buy-in to the idea also requires a kind of social compact, in terms of the wealthier cross-subsidising the poorer, to which the deeply polarised atmosphere of the moment in South Africa seems distinctly unsuited. DM

Gallery

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  • Thinker and Doer says:

    A terrifying aspect of the above, are that the completely unqualified costs to taxpayers are going to be astronomical. Also, the fact that the government will try and say it is covering absolutely all services, when it won’t be capable of providing them at a reasonable level, but at the same time won’t be able to get medical aid to cover those services, means that if you have or develop any type of serious, and particularly any rare, condition, you will be completely done for.

    Also, the serious discrepancy between what the Health Minister announced for timing of implementation, and what realistic tomeframes for implementation are, means that it is frighteningly vague and open ended as to how this will be implemented. I expect that the health department will disastrously seek to steamroll implementation as soon as possible, so that all of the funds are accessible, so it seems likely that implementation will be completely chaotic, while medical aid will be effectively precluded as an option, our taxes will become completely unbearable, there won’t be any specialists left, the funding will be completely plundered and wasted and we will be all left with a health care wasteland. What a bleak future.

  • Harry Boyle says:

    This current government cannot run a bath never mind a country as has been proved multiple times!

  • Fidelma of Cashel says:

    The super rich will just travel overseas for medical procedures. Which is what the politicians promoting the NHI are already doing…
    For the poor, the middle class NHI won’t be fun. The obvious solution would be to fix the existing public healthcare facilities and stop stealing from us, the citizens. Something that Babita Deokaran gave her life for.

  • Brian Cotter says:

    Missing question-
    What if, in the future, a health minister is once again appointed who claims that garlic and beetroot are better cures for Aids than antiretroviral drugs?

    • D'Esprit Dan says:

      A great question – and a damned scary one. However, the sleazy scum that have destroyed the public healthcare system won’t want to be selling cheap vegetables to the NHI when they’ve got hugely expensive drugs to milk the system with.

  • Cachunk Cachunk says:

    I wonder if anyone in the scum anc actually believes they could pull this off? Surely not, they can’t be THAT stupid! Then again…

  • Lyle Ferrett says:

    So effectively our medical aid contributions over the years is going to be expropriated? This doesn’t sit well with me. Hopefully, the middle class is willing enough to down tools before the elections in protest to this wholesale theft of our health insurances. 🙅‍♂️

    • Matthew Pantland says:

      Your medical aid contribution expropriated? Unless you are talking about your medical savings account (a small and optional part of your contribution) you don’t seem to understand medical aid.

  • Peter Binge says:

    A fund being administered by a Board and reporting to the Minister of Health. There is a huge trust issue. We simply do not trust the ruling party and given their track record nor should we.

  • Rae Earl says:

    The ANC looting fraternity is drooling at the thought of easy pickings from a massive cash pile run by the comrades. After collecting hundreds of billions in increased taxes and having it controlled by its own NHI Fund (ie the ruling party), who would notice a few billion being syphoned off through complex transactions, and into back pockets? The ANC couldn’t even run the Post Office FFS! It has screwed our once excellent formal medical facilities into the ground. Is that what qualifies them to run a huge and complex NHI health system? NOT!

  • Mike SA says:

    Come on Rebecca, we all know that there is no such thing as a free lunch. It is quite clear that banning medical aids is for the purposes of increasing the the tax on the haves as CR refers to the tax payers of South Africa, by that amount that we pay for medical aid, for 70% less benefits.
    It is not a coincidence that the EWC Bill has been pushed trough at the same time because this will be used to nationalize the reserves of the medical aid companies.

  • Geoff Coles says:

    This article by Rebecca says nothing new whatsoever

  • . . says:

    I have 3 thoughts / comments

    1)Considering the ANC and COSATU are so for the NHI, the most logical way to roll this out is to collapse GEMS into the NHI and see how that works.

    2)The issues is that even if medical schemes are allowed, the tax burden to fund the NHI will make them unaffordable to all but the top 0.01%.

    3) the NHI will undoubtable be progressively taxed on income and not health, and we will lose to ability to choose as scheme that fits our risk appetite and pocket. The degree of progressive taxation in SA is already one of the most extreme in the world and this will just compound that.

  • Paul McNaughton says:

    Is Nicholas Crisp of sound mind ?
    Does he really think that we can trust the ANC to manage the funds allocated to the NHI honestly and efficiently given their track record ?
    Instead of having a public health sector which is in a state of collapse due to corruption and mismangement and a private health sector which works well, we will end up with one health sector which will not function at all and will just become a gravy train for the cadres.
    Why dont they just fix the pubilc health sector like the DA has done in the Western Cape ?

  • PK PK says:

    Please press reboot 🙂

  • Johan Buys says:

    I have a constructive suggestion:

    Implement NHI as a controlled trial for only government employees starting with an even smaller trial among cabinet, parliament, provincial executive, metro executive – essentially everybody paid more than R1m per year. ALL of them cancel their private medical aid and support this initiative of The Party.

    If they are ecstatic and the numbers run well, roll it out nationally.

  • Indeed Jhb says:

    This is just another way to create jobs for the cadres and solve youth unemployment. Think of the structure that needs to populated – a board of 11 and a CEO (what we have seen re salaries for certain top people…. mmm) Then the various branches within the ”Fund” obviously specialist areas and the minions under them. Another government invention where the bulk of the total budget is for employees costs and service delivery expenditure must be kept to the minimum (read cheap and ineffective) unless its a tender
    The devil is always in the implementation at which this government is really useless – Consultants are already getting their toolkits ready they are in for a great run (it has not stopped since 1994) somebody after all, will have to do the job. We are already paying twice for everything – first the public servant’s salary (that special individual with scares skills) and then for the consultant to actually do the work
    At least the sun shines everyday right?

  • ST ST says:

    Say whaah?!

    “ The country has 7.1 million registered taxpayers, but just three million pay 90% of personal income tax.”

    You means out of ~60 mil people?! I knew it was dire but 3 mil! Add ~50% in grants, 32% unemployed! Hoekom then people pay themselves R5mil AND loot so boldly! Shameful. Anyway, I digress.

    So, if we have around 68% employed then other main source is employers payroll. Is that it? No other taxes?

    Nonetheless, my view is everyone should pay something, tax registered or not. People pay ‘pastors’ to live millionaire lifestyles. Surely, if we can do that, we can pay for our health. In Rwanda, community organisations get involved to support the fund. I think that’s our way out. (if we can trust politicians with it!). Not crying over keeping expensive private insurance as a primary source of our healthcare. It should be a luxury for the rich, not a necessity for everyone. Not in a country clearly so poor.

    ANC and believers forget the delusions over a tax based healthcare fund. Or any fund. We don’t trust you. Thanks to you, the tax base is getting depleted by the minute, the existing healthcare system is on life support. I’d ask you fix the existing system, but I doubt you know how. Now we are here, it’ll be hard even for the dedicated and competent. Countries that run successful healthcare funds e.g in EU, Singapore are run by more competent and not (so) corrupt people. Stop playing ANC. Time to go.

  • Gretha Erasmus says:

    What no one says is that this form of universal health care, this bill of the ANC has not been implemented anywhere in the entire world. Why not? Because it is unworkable, unaffordable and discongruent with a constitutional democracy. You either have a communist system like Cuba or North Korea, where private care is completely disallowed, or you have countries with universal healyh care systems where the government and tax cross subsidies health care so everyone can have access but private care and private medical aid/insurance is still allowed. Nowhere in the world is there this hybrid communist/no human rights/but we call it NHI system that the ANC has introduced. The lie that is repeated and repeated is that opposition to this piece of legislation is opposition to universal health care. That is blatantly untrue. There are many forms of universal health care in many many different countries in the world. None of which look like this NHI bill. And that is the lie of Nicholas Crisp and the DOH.

  • @Rebecca Davis – Excellent summary of the NHI bill. I have a much more interesting story related to Adrian Gore, please reach out to me but before you do, please check in with your Editor Mark Heywood regarding this story.

  • A Rosebank Ratepayer says:

    The article forgets to mention that policy uncertainty, such as that created by making this bill an act, is terrible on 3 fronts:
    1. Businesses’ investment horizon’s are at least 10 to 15 years, not 12 months.
    2. Younger medical professionals planning their own and their families future have horizons of at least 20 years.
    3. Analysis of national health service supply chains have found that big pharma are the biggest beneficiaries – Boots supplies up to 40% of the NHS supply chain. A centralised national health service creates a wonderful monopoly for a few suppliers. Big corporates hate competition.
    When coupled with BEE one sees the economic parallels with other monopolies in SA, power, transport, education, etc.
    4. Nicholas Crisp is of Zimbabwean stock. He appears oblivious to the chiShona concept of dzviRegera (the ability to take something that is working and slowly destroy it)
    5. SA already has a public health service, generally poorly run, although there is some (diminishing) pockets of excellence.
    6. I have not seen articles where Crisp decries the often shocking state of SA’s public health, the emigration of medics, nor makes proposals to fix it,
    He seems to think dismantling private health care and shifting its resources into the public sector is a magic panacea.
    7. He has not distinguished why this SA NHI strategy, of which he is the architect, will have a different outcome to the disastrous policies of his homeland.

  • Are over the counter medicine part of the NHI? For instance hay-fever medicine or cold medicine. Medicine that you don’t necessarily need to see a doctor for?

  • Joe Slabbert says:

    I am a surgeon in private practice. The reason I am in private practice, is that when I qualified, with two colleagues, only one consultant post was available, so we were asked to leave our department, as we were blocking registrar posts.
    Working in the private sector is not a holiday. You are self employed. You need to see all your patients, every single day. You have no subordinates to cover for you. If you are ill, or taking a break, you do not earn an income. Your overheads are high. Very high. You are in constant conflict with medical aids, and other entities such as the Compensation Fund. Your administrative burden, paperwork, is onerous.
    You do not get a pension, medical aid, or a thirteenth cheque.
    In many ways, working for the state would be a very comfortable existence.
    My experience of dealing with the state is with patients injured on duty, covered by Workman’s Compensation.
    This institution has existed for many years, funded by obligatory payments by employers, and administered by the state.
    For acute treatment, it works relatively well. However, things fall apart when a patient has chronic issues, such as paraplegia with pressure sores, long term burn management, hand injuries.
    The inefficiency, and indifference, of WCA is extraordinary, and getting worse.
    They care nothing for the patient, or the service provider. In fact, they are hostile towards both.
    Their sluggish inefficiency is legendary.
    Most service providers are forced to use third parties, such as Compsol, to extract any payment from WCA, at premium of 22 percent.
    This system has been around for many years, and has only become more difficult, frustrating, and expensive to deal with.
    If NHI has the same working philosophy as WCA, I can assure that the majority of service providers will rebel.
    Already, at the hospital I work in, in Johannesburg, we receive WCA patients from all over the country, transported at great expense, with often minor injuries, passing multiple other hospitals on the way, because these hospitals are unwilling to accept WCA patients.
    For NHI to have any chance of success would require an extraordinary change in mindset.
    I cannot see it happening.

    • Allan Thomson says:

      Thanks Joe!! What of the better summations I have read on this subject.
      I think we do forget that Workman’s Compensation works on a very similar basis… And think this is where Government’s misplaced confidence comes from.
      But as we know all to well… The opportunism does not only sit with Government… Corporate South Africa has a lot to answer for in aiding & abetting… And at the same time taking full advantage of the blissful ignorance sitting in Saud Government. I for one, am afraid of both sides of the proverbial isle… And see no end to the ordinary citizen being squeezed by BOTH sides for more!

  • George 007 says:

    The current government can’t even run the post office. This will never see the light of day.

    • Lisbeth Scalabrini says:

      ” This will never see the light of day.”

      That’s the only thing that can save the country from a health disaster.

  • Gabriel Smit says:

    baie mense bou lugkastele…. niks fout daarmee – maar pasop vir die lot wat daar intrêk!

  • Andrew Donaldson says:

    Rebecca, What the NHI Act envisages – despite the title – is a comprehensive “system” like the UK NHS with a centralised fund and allocations to component hospitals and primary care districts, with “purchase” of contracted private services on centrally determined tariffs or reimbursement arrangements. No individual members accounts or participation in sub-component competing “insurance” pools like the European social health insurance systems.

    • Joe Slabbert says:

      I truly cannot see a system like that being remotely functional in our country.

    • Joe Slabbert says:

      The hospital I work in was traditionally a Workman’s Compensation hospital, and everyone who works here, buys into that. The patients, who are often severely and horribly injured, get absolutely unrestricted treatment. They get the best we can give them, because they deserve it.
      We have an excellent manager, very well qualified to understand what massive trauma does to an individual. He, not just managing a hospital, is an active paramedic, and has done good, and saved many lives in his time.
      No colleague of mine will ever refuse to see a WCA patient. They give their best, despite the contempt of the Compensation Fund towards them. The patients truly deserve this, and it has been paid for, by their employers.
      The CF is a disaster, a tragedy, an absolute disgrace.
      Andrew, unless there is some form of high voltage shock therapy, applied regularly to our ruling classes, NHI will be no better.
      Include me out.

    • Joe Slabbert says:

      It would appear, according to our Manager, that our hospital is owed about 200 million rand by the Compensation Fund.
      What a joke to allow our pathetic,thieving, corrupt , inefficient, arrogant, uncaring, obstinate, useless, devious and criminal government to oversee our health budget.
      I truly think they are totally incompetent, incapable, and untrustworthy.
      Rebecca, I would really love to know your opinion.

  • Ray Jones says:

    The present Government is a big joke and seems to be a money target for the ANC Government and it’s Cadres.
    The UK & SA, are basically equal in numbers of people and considering they have all the Equipment and Staff (which they don’t), their budget for 2023 was R3,9 Trillion and their Estimated cost, is around R4,1 Trillion for the year.
    If their proposal to use the Services of outsourcing Public and Private concerns to support their ideals, R200 Billion for the year, would require a budget, at least 40 times that amount.

  • Lisbeth Scalabrini says:

    With the shortage of medical workers, doctors included, in most of the “Western World” I wonder what will be left in South Africa.
    DON’T GET SICK!

  • PJ T says:

    At the moment the government provides public hospitals and clinics. Technically this is what the NHI will offer, so why is it needed.

    If public health is falling apart, why will NHI make it work better?

  • PJ T says:

    The long term impact is that the small number of large taxpayers will emigrate to places where their doctors have gone.

  • Sihle Mkhamisa says:

    It sound scary and impossible now that it’s new and little or nothing is known of it.

    But as Former President, Nelson Mandela, once said: “it’s always seem impossible until it’s done.” So, for now it’s seems highly impossible, but sooner or later it all will make sense.

  • VW M says:

    The medical schemes may command a king’s ransom at the moment, but at least they’re keeping me alive, something I’m not sure the NHI will be able to do.

  • mike van wyk says:

    This type of scheme is similar to that in the US and it’s a disaster. There sheer numbers of people accessing such schemes result in a spiral to the bottom – meaning the standards of care drop dramatically so as to match the state budget – which is not fixed, as its subject to state revenue (tax), inflation, global economy and local economy. South Africa has more than half of its population on state grants and other forms of state assistance. Part of the tax revenue of the 7 million tax payers are state employees that will not benefit from these changes as these currently benefit from use of private medical services. Essentially this Bill renders private medical aid schemes null and void – meaning the life blood (revenue) of private medical services will be immediately impacted negatively. The Bill achieves exactly what it states; that private medical services will be required to care for a larger number of the population on state controlled fees – resulting in more work for less money – meaning the profitability levels currently enjoyed by private medical services, will be massively reduced. The impact of which will definitely be a lowering of standards. The will be an exit of critical skills (doctors, nurses and technical services) within the medical services industry, which will be the end of private medical services in South Africa. A very ignorant and stupid idea (pure Communism).

  • Ndivhuwo Masindi says:

    It took me several consultations with various doctors and physiotherapists, to finally diagnose what was wrong with me and all thanks to the private practice, which I doubt will have been the case should I have been at public health care. As it is now I’m still living with pain but minimal pain. A lot of people are going to die coz of the dire situation that we are supposed to be forced to use at the public hospitals. All public servants work for a prescribed benefit so if doctors are forced to work for the public service it is the patients who are going to suffer. In public service they pay you irregardless of whether you earned your pay or not

  • Brent Wilkinson says:

    I will not contribute one cent towards this, they can do what they want. I will not work for the unemployed nor will i gift my hard earned cash to them. This is the work of the government and it cannot just force me to take over it’s responsibility when it has proved that health care in it’s current state was destroyed by themselves.
    This is so far away from democracy, yet you all believe we live in one. It is a democracy when it suits them and an autocracy when it suits them. Go vote and waste your time, it has never been the vote of the people, it follows an agenda towards 2030. You are being dictated to and you have no say. Democracy?

  • Hammies Blaine says:

    I think that this just another scheme to generate a HUGE trough of money to feed the scavengers – just like Eskom etc.

  • Brent Wilkinson says:

    You are paying water for the unemployed, buying them electricity, buying them houses and now they want you to pay for their medical needs. Nowhere else does happen in the world. They do have national health systems, but it is paid for by insurance and their governments, not by their fellow citizens. Our government takes your taxes, but wastes or steals it, then they want us to foot their social welfare bills. These guys are from lala land, because that is unfortunately all their impaired brains allows them. Thinking is beyond their mental capacity.

  • District Six says:

    “The country has 7.1 million registered taxpayers, but just three million pay 90% of personal income tax.” How do economists come up with such gibberish?
    Every salaried person is a registered tax-payer. So there are only 7.1 million persons employed in South Africa?
    Ms Davis, please do a tax-explainer for the economists amongst us.

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