Medical schemes urge members not to panic – NHI is decades away
The controversial health insurance bill was signed into law, but it will be implemented gradually. By Neesa Moodley
In a surprise move that no one, least of all the healthcare industry, was expecting, President Cyril Ramaphosa signed the controversial National Health Insurance (NHI) Bill into law on 15 May.
One of the biggest concerns about the implementation of the NHI is that there is very little solid detail in the act. Costs and benefits are two key questions that remain unresolved by the NHI Act, which already faces constitutional challenges, according to Neil Kirby, director and head of healthcare and life sciences at Werksmans Attorneys.
At least six legal challenges are already in the works from various parties, including trade union Solidarity, the Health Funders Association, the South African Medical Association, the Board of Healthcare Funders, the South African Health Professionals Collaboration and the DA.
“We need to ask if the process of bringing NHI into law has been fair to those involved, with a proper appreciation of the implications for the stakeholders that are interested and affected by this legislation,” Kirby said.
Widespread reactions from the healthcare industry last year indicated that none of their submissions had been taken into account when the bill was passed by the National Council of Provinces in December.
The billion-rand question of costs
The biggest question most have is about how South Africa will foot the bill. “How much is this going to cost? And can we, as a country – whether the cost is R140-billion to start with and R700-billion at the end – afford it?” Kirby asked. “Can we afford to have national health insurance along with other national priorities and policies that are equally as important as healthcare, [such as] education, security and infrastructure?”
National Treasury told Daily Maverick that the funding mechanism for NHI has not been finalised. “Any details on tax amendments to raise resources for NHI would be announced in a budget speech by the minister of finance.
“The timing of these amendments would be linked to the progress in setting up the NHI fund and operationalising NHI, which may take a number of years,” Treasury said.
Mark Blecher, who has led the Treasury team on health financing for years, was much more blunt when he told the Financial Mail that it would take three decades to fully implement the NHI.
Business as usual for medical schemes
The Council for Medical Schemes issued an appeal for medical scheme role players and members not to panic or cause widespread speculation, pointing out that the NHI Act will take effect on a date fixed by the president by proclamation in the Government Gazette.
“Importantly, Section 57 of the act states that NHI will be gradually phased in using a progressive and programmatic approach based on financial resource availability,” the council pointed out, adding that, against this background, the Medical Schemes Act and its regulations still apply. It urged members of medical aid schemes not to abandon or cancel their memberships.
Adrian Gore, chief executive of Discovery, said that, in its current form, the NHI Act is not feasible as it rules out private sector collaboration. Much of the concern currently doing the rounds is based on Section 33 of the act, which states that once the NHI is “fully implemented”, medical schemes will be allowed to cover only those services not covered by the NHI.
“The impact of Section 33 is that only once the NHI is ‘fully implemented’ will medical schemes be limited in the cover they provide to medical scheme members. Until that time, there will be no change to your medical scheme cover. We believe it will take a long time – a decade at least – to achieve ‘full implementation’, given the scale and complexity of reforms needed.
“Bear in mind the NHI is an inordinately large and complex initiative that proposes extraordinary change and restructure to public and private healthcare systems. This is unprecedented and will be incredibly difficult to achieve,” Gore said, adding that even when the NHI is fully implemented, medical schemes will still be able to provide cover for benefits not covered by the NHI. “This is important because the NHI is unlikely to have sufficient funding to provide an extensive package of benefits. Our country unfortunately faces significant financial constraints linked to low economic growth and a very narrow tax base. Medical schemes will therefore still play a significant role [after] full implementation of the NHI,” he said.
His sentiments were largely shared by Damian Mchugh, chief marketing officer at Momentum Metropolitan Health: “The implementation of the NHI Bill in its current format is not sustainable, and we expect the already documented challenges made by numerous stakeholders to become more vocal, particularly around the constitutionality of the bill. Another key consideration is that the South African economy does not have the required funds to support its implementation.”
Craig Comrie, chairperson of the Health Funders Association, said its members were “deeply disappointed” that the opportunity to review certain flawed sections of the NHI Bill had been missed.
“Even with the President signing the NHI Bill into law on Wednesday, there will be no immediate impact on medical scheme benefits and contributions, nor any tax changes. The association is well prepared to defend the rights of medical scheme members and all South Africans to choose privately funded healthcare, where necessary,” he said.
Only once the NHI is ‘fully implemented’ will medical schemes be limited in the cover they provide... Until that time there will be no change to your ... cover