The government’s National Health Insurance (NHI) Bill does not clarify how it will affect private medical schemes and the larger insurance industry.
This is the warning from legal experts from the law firm Webber Wentzel, which said it is unclear how the NHI will be funded and what services it will cover.
The National Assembly passed the NHI Bill earlier this year, and it is currently with the National Council of Provinces for consideration.
The NHI Bill aims to provide universal healthcare coverage to all South Africans.
It proposes converting the country’s current two-tier system into a single system that should provide all South Africans access to either public or private healthcare.
The NHI scheme will bear the costs and enter into contracts with hospitals and other role-players.
Clause 33 of the Bill states that once the NHI is fully implemented, medical schemes can only offer complementary coverage for services not reimbursed by the NHI.
Clause 6(o) of the Bill allows individuals to purchase services not covered by the NHI through voluntary medical insurance schemes.
This means medical schemes cannot cover services already covered by the NHI, potentially jeopardising their existence, Webber Wentzel’s experts warned.
“This approach may face constitutional challenges related to the right to access healthcare, property rights of medical schemes, and freedom of trade and profession.”
While the NHI Bill is still just a piece of framework legislation, it does not clarify what will become of insurance under the current regime, the firm’s experts warned.
“The fate of medical schemes is dealt with in a very cursory manner, without considering the nuances of the current regime.”
An alternative model
Discovery Health CEO Ryan Noach said the single-funder model described in the NHI Bill would not be able to achieve the government’s goal of equitable access to healthcare.
Noach previously told Daily Investor that Discovery Health does not endorse the single-funder model proposed in the NHI Bill.
“This approach is not only risky and inefficient, but it is also unlikely to be equitable since cross-subsidies cannot be properly managed,” he said.
According to Noach, passing the NHI Bill will have no immediate impact on medical schemes.
However, section 33 states that once the NHI is fully implemented – with no clear definition of what this means – medical schemes would not be allowed to provide cover for anything the NHI covers.
“In other words, at the discretion of the minister, when the NHI is fully implemented – the schemes would only be allowed to offer what the NHI does not offer.”
Therefore, the NHI would be a single monopolistic funder for the NHI package of services.
“Even though this may be some way off, given that Department of Health officials have said it may take a decade for NHI to be fully implemented, this provision drives away investment in the health sector and the opportunity to encourage the development of innovative healthcare delivery models for all South Africans.”
As an alternative, Noach recommended a multi-fund framework, which he described as “not only less risky and faster to implement, but also ensures that cross-subsidies are managed to ensure that social solidarity is achieved”.
He believes financial integrity and sustainability can only be achieved through collaborative work between the private and public sectors, “built on the strength of the Covid-19 partnerships that served South Africa so well”.
Discovery had made comprehensive recommendations to Parliament explaining how a multi-funder approach can speed up the implementation of NHI for the benefit of all South Africans.