Good news for medical aid members in South Africa

The government’s National Health Insurance (NHI) scheme will radically change South Africa’s healthcare industry if implemented. However, it is unlikely to affect medical aid members for many years.

The implementation of the National Health Insurance Act has progressed significantly in recent months.

In May, shortly before the national election, President Cyril Ramaphosa signed the Bill into law after promising to do so for months.

The scheme seeks to reform South Africa’s healthcare system, establish universal access to health services, and address significant socio-economic disparities from the past.

The legislation outlines a state-run fund to deliver universal care and prohibits the private sector from funding treatments included under the plan.

The most recent advancement was the signing of the second Presidential Health Compact, which is Ramaphosa’s attempt to get the government, businesses, and healthcare professionals to support the implementation of NHI in its current form. 

However, every step of this legislation’s progress has been marred with controversy, as several industry stakeholders have staunchly opposed it.

While many support universal health coverage as a concept, their criticism of this legislation revolved around other aspects of the plan, including its constitutional validity, economic feasibility, and potential impact on both the public and private healthcare sectors.

The latter critique has been one of the most controversial aspects of the NHI, as the legislation essentially makes private medical aids in their current form illegal in South Africa.

Under the NHI, private medical aids cannot provide cover for any services that the NHI covers, which are yet to be revealed.

Legal experts from the law firm Webber Wentzel warned last year that the government’s NHI Bill does not clarify how it will affect private medical schemes and the larger insurance industry.

Clause 33 of the legislation states that once the NHI is fully implemented, medical schemes can only offer complementary coverage for services not reimbursed by the NHI.

Clause 6 of the Bill allows individuals to purchase services not covered by the NHI through voluntary medical insurance schemes. 

Webber Wentzel’s experts warned that this means medical schemes cannot cover services already covered by the NHI, potentially jeopardising their existence.

“This approach may face constitutional challenges related to the right to access healthcare, property rights of medical schemes, and freedom of trade and profession,” they said.

Business Unity South Africa (BUSA) CEO Cas Coovadia has suggested that, rather than having a single fund, each South African must be given a choice between public or private healthcare.

However, this suggestion has been ignored, as government officials have been reluctant to engage with stakeholders on suggested changes to the legislation. 

In August, Health Minister Aaron Motsoaledi told the Bhekisisa Centre for Health Journalism that he is not prepared to negotiate, especially not on the section that would outlaw medical aids in their current form.

However, some headway has been made as President Cyril Ramaphosa recently approached BUSA to and requested that the lobby “put forward specific proposals on the remaining issues of concern as a basis for further engagement”.

“The government remains committed to engaging with all stakeholders in good faith in the process of health-care reform and finding workable solutions that will advance quality and affordable health care for all,” the Presidency said.   

BUSA has previously described the plan as unaffordable and unconstitutional. It has also said the legislation, in its current form, is unimplementable and damaging to the country’s healthcare sector, the economy more broadly, and investor confidence.

Don’t cancel your medical aid because of NHI

While the exact impact of the NHI on private medical aid is still unclear, one issue is agreed upon on both sides – South Africans should not cancel their medical aid because of NHI.

In May this year, former Health Minister Joe Phaahla urged South Africans not to cancel their medical aid as the government’s NHI scheme will take years to fully implement. 

While the government has promised that signing the NHI into law will result in universal healthcare free at the point of delivery, this ambition is far from reality. 

According to the NHI Act, it will take around 10 to 15 years for the scheme to be fully implemented, and it is clear that even then, there will be room for private medical aid to cover certain procedures. 

This expectation also does not account for the fact that the NHI will most likely be tied up in South Africa’s courts for years, with business groups and medical organisations threatening to challenge it. 

“On medical aids, I have seen some hilarious statements that I hope were just jokes, saying that people were going to cancel their medical aids and saying the 30th of May would be their last deduction,” Phaahla said. 

“We want to say to all South Africans. This is a process that when it is ready, you will be informed, and medical aid providers will be informed.”

“Medical aid schemes are still there. So keep your medical aid. Everything will be transparent. the day when the NHI becomes a reality, the Ministry will announce it.”

“Please, don’t throw away your medical aid schemes and stop your debit order,” Phaahla pleaded. 

Following the signing of the NHI Bill in May this year, Consult by Momentum’s franchise principal and financial adviser, Shaun Meintjes, also warned South Africans not to cancel their medical aids.

“If you can afford it, I would strongly caution against cancelling your current medical health cover any time soon,” he said.

He gave four reasons for this:

• Overburdened public healthcare: The public healthcare system is already strained.
• Lack of clarity on NHI coverage: The NHI coverage is not yet fully defined.
• Administrative complexity: The transition to NHI may introduce administrative challenges that will take long to resolve.
• Potential slowdown in healthcare innovation: The shift to a single-payer system could reduce investment in medical technology.

Discovery has also said the legislation would not change the status quo until much later.

Until then, and despite concerns about the law’s potential impact on private insurers, Discovery believes there is a desire to find solutions that benefit all South Africans.

Discovery CEO Adrian Gore said he was heartened by the engagements between Ramaphosa and BUSA.

“I got a good-faith feeling from that meeting that there’s a desire to find solutions – that’s a much better road than conflict and litigation,” Discovery CEO Adrian Gore, who is also BUSA’s vice president, said in an interview.

“I don’t think anyone believes the status quo is acceptable. I think everyone’s saying, ‘How do you make this thing operate so that it helps all South Africans?’” 

“I don’t think people should be concerned about in the short term, but in the medium to long term, we’ve got to find solutions.”