Efficient Group chief economist Dawie Roodt said the government’s plan to implement National Health Insurance (NHI) in South Africa is just a dream and will never happen.
Parliament’s National Council of Provinces approved the NHI Bill in December last year, and it is currently with the President, who can either assent to it or ask lawmakers to amend it if deemed to be legally or technically flawed.
The legislation provides a framework for the provision of universal care through a state-run fund and will ban the private sector from financing treatment covered under the plan.
The Bill has faced a lot of opposition from industry stakeholders, including prominent businesspeople like Busi Mavuso, Adrian Gore, and Martin Kingston.
Roodt told RSG that the NHI faces two major challenges that mean it will likely never be implemented.
The first challenge is funding. A report released by the Solidarity Research Institute found that the National Treasury will need an additional R295.93 billion to fund the government’s NHI plan.
This makes the plan unaffordable since the government’s fiscal health has deteriorated significantly over the past few years – particularly in the 2023/24 financial year, in which the government now faces a deficit of around R350 billion.
The government has mentioned the possibility of raising taxes to fund the NHI, but considering South Africa’s already over-burdened tax base, this is unlikely to work.
Roodt identified the NHI’s second biggest challenge as the government’s own inefficiency.
He said the government is generally incapable of getting things done – regardless of whether they are good or bad for the country.
In this case, the government’s inefficiency means the potentially harmful NHI will also never actualise.
In addition, Roodt said that even if the President signs the Bill into law, it will face several lawsuits and be tied up in court for years to come.
“Don’t be worried – NHI is just a dream,” Roodt reassured.
Despite the NHI’s unlikely implementation, it has already had devastating consequences for South Africa, according to Business for South Africa (B4SA) Steering Committee Chair Martin Kingston.
Kingston’s comments come as Business Unity South Africa (BUSA) and B4SA are preparing to submit a petition to President Ramaphosa, requesting that the Bill be referred back to the National Assembly for amendment.
He said BUSA and B4SA have highlighted the problems with the NHI consistently throughout the Parliamentary process.
“Our concerns, recommendations, research, data, and inputs, as well as those made by a range of experts and affected stakeholders, have been summarily ignored,” he said.
“No amendments were made at all, including those suggested by the Department of Health itself.”
In particular, Kingston is concerned about the devastating consequences of the NHI Bill being passed by Parliament. These effects are already being felt before it even becomes law.
“The consequence of passing this Bill, unamended, is devastating,” he said.
“It will materially delay access to universal health coverage, lead to disinvestment in the healthcare sector, further damage our already fragile economy, and create significant risks for the country in terms of the quality, management, and governance of healthcare.”
One sector of the economy that stands to lose out the most is health insurance, as medical aids will only be able to offer coverage for medical procedures that are not covered by the NHI.