SOUTH AFRICA: Why Does the Country Wait for Universal Healthcare?

In this iPMI Global regional country guides article, iPMI report author and market analyst Ian Youngman, takes a look at South Africa, and asks why the country has to wait for universal healthcare.

• That it is an election year may be the reason for the president to either sign the bill or delay it until after the election.
• South Africa's President Cyril Ramaphosa has said he plans to sign into law a National Health Insurance (NHI) bill that aims to provide universal health coverage to South Africans, although he did not give a time frame.
• The bill, which will be implemented in stages at a cost of billions of dollars, is waiting for Ramaphosa's approval after being passed by lawmakersin 2023.
• The NHI bill is now in review with the National Council of Provinces (NCOP).
• Once the bill is finalised and approved by the NCOP the decisive step will be for the President to approve it and sign it into law.
• The bill seems popular among voters, but the president may worry that it is not popular with businesses, insurers and some healthcare groups. He may not want to have them in opposition during the election.

• The South African government has been advocating for the National Health Insurance (NHI) and the introduction of Universal Health Care in South Africa since 1994.
• The NHI Bill aims to guarantee equal access to healthcare services.
• The Bill outlines mandates responsibilities, and organisational structure of the NHI fund.
• For all individuals who register with the Fund, the Fund will purchase healthcare services from the private sector to fill the gap of available services in the public sector.
• South Africa’s healthcare system is currently experiencing problems, according to numerous evaluations of the private and public healthcare sectors.
• Accessibility issues in the public sector, rising costs of medical aid contributions in the private sector, and a lack of resources are just a few.
• The current South Africa healthcare system is a 2-tier system with a private sector that provides private healthcare to 14.9% of insured members who can afford private insurance and a public health system providing care for the remaining 85.1% of the population.
• The NHI Fund will be predominantly funded by incorporating funds from the current healthcare budget, GEMS (Government employee medical scheme) member subsidies and tax breaks that were previously paid towards private insured individuals will now be paid towards the fund.
• Mandatory contribution for all individuals belonging to the fund will be incorporated into the pool of funding that will support the NHI fund (compulsory participation for every employed individual person).
• Medical aid programmes may only provide cover for services that are not covered by the NHI Fund after the NHI Fund has been completely established.
• More than 9 million people who are currently covered by commercial medical aid insurances will fall under the state’s fiscal responsibility.
• The challenge for the members who are now insured is that tax payments to support NHI will be mandatory.
• The medical insurance will be unaffordable for most members if no subsidies are made from the employers.
• It is envisioned that employers will no longer support individuals on monthly contributions under the new NHI system.
• There are current and expected legal battles from industry stake holders in relation to the new bill.
• The consensus is that the full implementation of the NHI bill will not be realised before 2030.

The effect on private health insurance

• Medical aid programmes may only provide cover for services that are not covered by the NHI Fund after the NHI Fund has been completely established.
• Insurers are worried that few people will buy top up cover.
• Whether or not people with IPMI can opt out of the NHI is still undecided.