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

  • Author, Farouk Chothia
  • Role, BBC News, Johannesburg

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

He promises universal health care for all, but has faced fierce resistance from the main opposition party, the Democratic Alliance (DA), which accused the president of signing “the ruling of death” in health care in South Africa.

He warns that the project could be extremely costly and fuel corruption.

What the law says?

The National Health Insurance (NHI) system advocates the creation of a public fund to cover medical costs for all South Africans, most of whom are currently not covered.

It goes further by prohibiting people from taking out private health insurance for treatments paid for by the fund, which is proving highly controversial.

“Once the NHI fund covers a benefit, medical plans no longer cover the same benefits,” the government says.

This is different from countries like the United Kingdom, which has a publicly funded National Health Service (NHS), but where people are free to take out medical insurance to receive the treatment they want from doctors. and private hospitals.

Once the NHI scheme is fully implemented, “the role of medical schemes will change as they will cover services not reimbursable by the NHI fund”, it says.

In a post on X, formerly Twitterthe government affirms that everyone will be able to “access general practitioners, clinics or hospitals approved by the INSA closest to their home, whether in the public or private sector”.

“This means that when you feel unwell, you can go to your GP or nearest clinic with a contract with NHI without worrying about the cost of care,” he adds.

The government has not specified what treatment private hospitals and NHI-accredited GPs will be required to provide, but says this will include emergency services, mental health services, palliative care and rehabilitation services.

Why did the government come up with this project?

Mr Ramaphosa says the NHI is an “important instrument to combat poverty”.

“The rising cost of health care impoverishes families. In contrast, health care provided through the NHI frees up resources in poor families for other essential needs. The NHI will make health care overall of the country more affordable,” he adds. in comments posted on X after signing the bill.

The plan is seen as an attempt to boost the chances of the ruling African National Congress (ANC) in the May 29 elections, at a time when opinion polls suggest the party could lose its absolute majority. for the first time in 30 years.

During the election campaign, Mr Ramaphosa made the NHI one of his key promises to voters.

“We will end the continuing apartheid in health care, where the best care is given to the rich and the poor care to the poor,” he said at a rally last month.

The center-right DA has come out strongly against the NHI in a bid to rally its voters.

In a statement on Tuesday, DA leader John Steenhuisen said the plan would result in “huge tax increases” with the money “deposited into a central fund controlled by an all-powerful ANC cadre “.

“The looting that will take place is easy to imagine, but too horrible to contemplate. Just like the ANC cadres looted (the electricity company) Eskom to the point of destroying our electricity supply,” he said. declared.

How will the NHI be paid?

The Parliament website identifies three main sources of funding:

  • general taxes
  • contributions from people earning more than a specified amount (which has not been specified) and
  • monthly contributions paid by employees to the fund.

The government has not said how much people will need to contribute or how much will be needed to fund the NHI.

However, the explanation on the Parliament’s website states that “the cost of our health system, which is currently the most expensive in the world, will be reduced.”

“When people visit health facilities, no fees will be charged, as the NHI fund will cover the costs of medical care in the same way as medical aids do for their members,” it says.

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

It says the project will cost “well over R200 billion ($10 billion; £8.6 billion) a year – with some estimates reaching up to a trillion rand”.

So what happens next?

The DA announced it would take legal action to try to stop the project from going ahead.

He says he supports universal health care, but that the NHI “will destroy South Africa’s private health system and thereby sabotage any chance of repairing our public health system”.

“Just this week, nine healthcare associations, representing 25,000 healthcare professionals, declared the NHI unworkable,” Mr Steenhuisen wrote in an article published on the News24 website.

The Daily Maverick reported that the government was likely to face an “avalanche” of litigation, including from the South African Medical Association.

One of the main arguments against the legislation is that it will restrict people’s right to purchase private health insurance to cover their medical costs.

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.

Opposing parties will likely face off in South Africa’s highest court, which will have the final say on whether the legislation is implemented.

Even if the Constitutional Court gives the green light, the project will probably be introduced gradually over many years, in particular because the government will first have to find the funds necessary to finance it.

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

How many South Africans rely on private and public healthcare?

The government says around 14% of the population receives private medical care, but its costs are rising without “much improvement in health outcomes”.

The remaining 86% of the population cannot afford medical help and depends on public clinics and hospitals which, the government acknowledges, are “overloaded”.

So a system has emerged that will allow rich and poor to obtain health care without a GP or private hospital first requiring payment – which currently happens even if a patient needs treatment. ’emergency treatment for a potentially fatal illness.

The concern for private hospitals is that the government’s plan will cause them to find themselves overwhelmed with patients, with no guarantee that they will receive payment from what may be a mismanaged NHI fund.

Read more about the 2024 South African elections:

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