We’re all for universal healthcare, but the National Health Insurance Bill in its current form is a cause for concern.

On 6 December 2023, The National Council of Provinces (NCOP) passed the controversial NHI Bill. The bill now sits with President Cyril Ramaphosa to sign into law. 

Eight of the nine provinces voted to approve the bill. The Western Cape voted against it.

Business Unity SA (BUSA) and Business4SA (B4SA) are raising eyebrows. They’re saying, “Hold on a sec, South Africa doesn’t have a money tree. We can’t just magic up an extra R200 billion in taxes for this NHI thing.” And you know what? They might have a point.

The Democratic Alliance has said they will petition President Cyril Ramaphosa not to sign the bill and to refer it back to Parliament. They argue that the bill is unconstitutional because it talks about phasing out the benefits for which medical schemes may reimburse members, severely limiting access to healthcare.

Just what is the NHI Bill proposing? 

The NHI will be funded through a mandatory pre-payment system, supplemented by a payroll tax payable by employers and employees and a surcharge on individuals’ taxable income. The National Treasury gets to determine the funding sources AND any changes in dedicated NHI contributions in line with the fiscal and economic environment, much like how our tax gets decided. 

Private healthcare providers will continue to operate under the NHI, but they cannot set their own fees for NHI-funded benefits. The Fund will set these fees. Private providers will have the opportunity to contract with the NHI to provide health services to a broader public. This could see an end to medical aid schemes.

Now, done well, like in Rwanda, the NHI could be a positive thing for South Africa. But in its current iteration, it’s just not going to work. 

The government has a momentous task on its hands to make sure that quality healthcare is accessible for the majority of the country, but it needs to do so correctly. The current bill, as it stands, seems too much like desperate ANC electioneering. 🙄

This brief is part of our Year That Was 2023 edition. Read the full edition here.