NHI under siege 

The Health Funders Association (HFA) has launched a legal challenge against the government’s National Health Insurance (NHI) Act, saying it is unaffordable, unworkable, and unconstitutional. 

This challenge comes on the heels of the third Budget Speech from the Finance Minister, which was the first time funding has been allocated to the NHI through direct and indirect conditional grants. 

The 2025 Budget Review revealed that, over the medium-term expenditure framework (MTEF), the indirect and direct conditional grants for NHI are allocated R8.5 billion and R1.4 billion, respectively.

This totals R9.9 billion allocated for NHI over the next three fiscal years, from 2025/26 to 2027/28.

The National Treasury said the Department of Health will fund the development of a patient information system, a centralised chronic medicine dispensing and distribution system, and a facility medicine stock surveillance system. 

This will be done to strengthen the country’s health system and prepare for the NHI policy.

The HFA explained that the NHI Act will centralise control of all healthcare financing in a single, state-run fund that will remove the ability of private medical schemes to offer cover for services. 

“This effectively outlaws the constitutional right of citizens to choose how to access or fund healthcare beyond what the state provides,” its statement read. 

Apart from this constitutional issue, the HFA said that the NHI is simply unaffordable and would require significant tax increases to fund. 

Momentum Health has estimated that the NHI would result in each South African taxpayer paying R43,000 in additional tax every single year. 

This would be far beyond South Africa’s fiscal capacity, the HFA said, and would risk crushing the local economy. 

“What’s more, the proposed model offers no guarantee of improved outcomes, while restricting the mechanisms that currently drive quality and innovation in healthcare,” it said. 

“HFA is taking this legal step not to delay progress, but to help ensure that national health reform is grounded in constitutional principles, financial realism, and patient choice.” 

The organisation said it would continue to advocate for a more inclusive, hybrid funding model that incorporates private medical schemes in NHI. 

It believes such a model would expand access to care while protecting the rights of all South Africans and avoiding putting additional pressure on taxpayers. 

Challenges to the NHI

This is the latest legal challenge against the government’s NHI plan, with trade union Solidarity launching the first blow to the scheme in 2024. 

In July 2024, the Pretoria High Court ruled in favour of Solidarity in its case against the Minister of Health, the President, and the Health Department’s Director-General, declaring sections 36 to 40 of the NHI Act unconstitutional. 

These sections, which required a Certificate of Need for healthcare practitioners to operate in specific areas, were found to unlawfully infringe on the rights of medical professionals.

Following the ruling, Solidarity CEO Dirk Hermann stated that this decision suggests parts of the NHI Act may also be unconstitutional.

This was followed by a legal challenge form the Board of Healthcare Funders (BHF) taking the scheme to court. 

It argued that the NHI Act is too vague to be implemented, is unconstitutional, and is unaffordable. The BHF is seeking to set aside President Ramaphosa’s decision to sign the NHI Bill into law. 

“The BHF is challenging the NHI Act in court because we do not believe it will achieve the government’s objective of achieving universal health coverage by 2030.” 

“This is because we believe the NHI Act is too vague to be implemented, is unconstitutional and is unaffordable.”

Instead, it said the NHI Act will undoubtedly result in a regression of healthcare services in South Africa. 

“It, as well as other management failures, will result in the mass departure of skilled healthcare professionals; concentrate excessive power in the national department of health and will do nothing to address the current administrative deficiencies in our healthcare system,” it said.

The BHF also warned that if the NHI is implemented in its current form, it will undermine coverage for the 9.7 million South Africans in private medical schemes. 

“The BHF contends that removing healthcare benefits, for even just one of these beneficiaries, is in breach of section 27 of the Constitution, which guarantees everyone the right to access healthcare services,” it said.

The organisation is also concerned about how the Bill was assented to and made law.

President Cyril Ramaphosa signed the NHI Bill in May 2024, bringing it into force as an Act of Parliament. 

The BHF claims that, in doing so, he ignored all the well-reasoned arguments made by a range of stakeholders, including business, civil society, and health interest groups. 

This includes several representations made by the BHF to the President outlining why the NHI Bill was unconstitutional.

“As there were clear reservations about the constitutionality of the legislation, the President was obligated by law to refer the Bill back to the National Assembly for reconsideration. He did not do this,” it said.

“In the circumstances, the BHF had no choice but to request the High Court to review and set aside the President’s decision to sign the Bill into law.”