South Africa

NHI is dead on arrival 

Joe Phaahla

The government’s National Health Insurance (NHI) scheme is dead on arrival as it will be tied up in South Africa’s courts for decades. 

This is feedback from business leaders and experts, who said that the scheme would be legally challenged with a good chance that the country’s courts will determine that it is unconstitutional. 

President Cyril Ramaphosa signed the NHI Bill into law on Wednesday, 15 May, just two weeks before the country’s national elections, where his party is expected to lose its majority. 

The NHI Act aims to transform South Africa’s healthcare system to achieve universal coverage for health services and, through this, overcome critical socio-economic imbalances and inequities of the past. 

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. 

There has been widespread support for reform of a system that sees a multibillion-rand private healthcare industry servicing only 16% of the population and the balance relying on overburdened public facilities.

However, business groups have threatened legal action against the NHI based on the legislation’s unconstitutionality and the scheme’s lack of funding. 

Business Unity South Africa CEO Cas Coovadia said that, in response to the NHI becoming law, the organisation would consider its options, including legal action. 

“Our subsequent actions will be guided by our belief that it is essential that we get the NHI right through all means still at our disposal, including appropriate legal interventions,” Coovadia said. 

“This is so that the legislation that is finally implemented is in the best interest of our country, and all her people, for generations to come.” 

Business Unity SA (BUSA) CEO Cas Coovadia

Business for South Africa (B4SA) steering committee chair has said the NHI scheme will effectively be stillborn as it has no practical funding model, does not pass Constitutional muster, and will be tied up in the courts. 

“The reality is that with the NHI being signed into law as it is now, I suspect there are many people that are going to litigate,” Kingston said. 

“It will effectively be stillborn and will not proceed until the courts have applied their minds. We think it does not even pass Constitutional muster.”

Kingston explained that the NHI is a critical piece of legislation and should not be rushed through by the government. 

“We support the need, as business, for universal healthcare under the Constitution,” Kingston said. That means the NHI has to comply with the Constitution procedurally and substantively, which it does not.”

Kingston said the Portfolio Committee on Health did not consider any suggestions made by the public, including by the Department of Health and four provincial governments. 

Martin Kingston
Martin Kingston

Business groups are not the only ones threatening legal action, with trade union Solidarity saying when the NHI was passed by the National Council of Provinces that it would challenge the legislation in court. 

In a letter of demand sent in December last year, Solidarity reiterated its intention to hold the role players accountable in their personal capacity should the NHI process proceed.

The players include President Cyril Ramaphosa, the finance minister, the health minister, and the National Treasury.

According to Solidarity’s CEO Dirk Hermann, the trade union has done everything necessary to prepare for the inevitable court battle.

“In such a case, we will make it plain that the parties had the opportunity to enter into discussions with us before litigation to avoid a costs order in person,” he said.

“We would then also mention that the parties involved chose not to discuss the matter with us.”

Solidarity has repeatedly indicated why the NHI in its current format is unworkable, unaffordable and unnecessary.


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