Unpacking the National Health Insurance Bill

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“The National Health Insurance (NHI) is a financing system that will make sure that all citizens of South Africa (and legal long-term residents) are provided with essential healthcare, regardless of their employment status,”

introduces the South African Department of Health.

Effectively, the government has drafted the National Health Insurance Bill to replace a healthcare system wherein poor and unemployed people have unequal and inadequate access. If this Bill passes into an Act, the health care of all South Africans, rich and poor, will depend on this legislation. So it’s very important that we unpack and comment critically on the bill.

What’s wrong with the current system?

Historically, white people had access to “private general practitioners in a fee-for-service arrangement, before being referred, if necessary, to specialists or for admission to “whites-only” public hospitals which were funded and managed by the provincial health departments,” according to Professor Shabir Moosa of the the Department of Family Medicine and Primary Care, University of Witwatersrand.

A study shows that among black people living during the early years of apartheid “30-50% of live births died before they turned five” and “the life expectancy of a (black) male was 36 and a (black) female 37.”

Infant Mortality Rate Trends

At the time, black people were “referred to “black” hospitals, preferably in the homelands.” The construction of the public healthcare system created two worlds of access, still mirrored today.  Only 17 in 100 South Africans (16,4%) have medical insurance” according to the 2018 General Household Survey. “The best evidence suggests that health insurance is associated with more appropriate use of health care services and better health outcomes for adults,” states a US study.

Equity is the core issue with the current health care system, leading to inadequate services for the majority of the population.

Health care in South Africa does also have other issues. “South Africa’s biggest public health problem is its combined HIV/TB infection rate” and they “appear to be under treated at the primary care level.” Another much discussed issue is the migration of health professionals. A World Health Organisation report states that measuring this migration is a challenge because “systematic data on international flows of health workers from South Africa” are absent. However, the study does suggest that “internal migration of nurses within the South African health care sector and emigration to other countries are two major factors that have contributed to the high turnover rate of South African professional nurses.”

Health Care 2

As pictured above, hospitals generally have poor performance scores, with a national average of 41%, (which is higher than the score for clinics and CDCs), according to the 2018 South African Health Review. The study measured “compliance with national core standards, notably the ability of a health facility to provide safe and effective patient care through effective management of human resources, finances, assets and consumables, and records and information on the provision of scheduled services.”

So, clearly, there are many interrelated issues facing the South African health care system. Equity, however, can and should be solved. Section 27 of the Constitution states, “Everyone has the right to have access to health care services” and that “the state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation” of this right.

What does the NHI entail?

Medically necessary healthcare services

The NHI will cover “comprehensive health care services” defined as “health care services that are managed so as to ensure a continuum of health promotion, disease prevention, diagnosis, treatment and management, rehabilitation and palliative [pain-relieving] care services.” This excludes services that are “not deemed medically necessary.” For those services, people would have to pay themselves or through private medical insurance.

If this language is vague to you, then you’re not alone. As reported by Business Live, “the benefits the fund will offer must be agreed on and costed. There isn’t yet even a proposal on what these benefits will be.” This means apart from clearly medically necessary services, it remains unclear how much the NHI may cover.

Single-payer system

According to the bill, the government will become

“the single purchaser and single payer of health care services in order to ensure the equitable and fair distribution and use of health care services.”

This means that the NHI will pay for health care on our behalf specifically to address unequal access. The bill describes that all will “receive necessary quality health care services free at the point of care.”

A “single-payer” healthcare system is one where only the NHI will be able to pay for certain health-care costs.

So, what happens to private medical aid?

The bill acknowledges voluntary private insurance schemes and rather than abolishing them, one of the aims of the bill is to establish the relationship between these schemes and the NHI.

They will be “restricted to providing complementary cover for health care service benefits that are not purchased by the Fund on behalf of users.” This means they can continue to exist, but only to cover medical costs not already covered by the NHI, which the bill also refers to as “top up cover.”

The bill is clear that it “applies to all health establishments, excluding military health services and establishments.”

Universal Access

The core reason to implement the NHI is to ensure Universal Health Coverage (UHC). The term, UHC, has become very important in international discourse recently as more countries move toward creating such health care systems. Notably, the United States is currently in the midst of a major UHC debate, shaping previous and the upcoming presidential elections.

The NHI will fund all South African citizens, permanent residents, refugees, inmates and “certain categories or individual foreigners.” The bill states that “an asylum seeker or illegal foreigner is only entitled to emergency medical services and services for notifiable conditions of public health concern.”

There are, however, a few internationally agreed principles to universal access. The World Health Organisation lists the following three:

  • Equity in access to health services – everyone who needs services should get them, not only those who can pay for them;
  • The quality of health services should be good enough to improve the health of those receiving services; and
  • People should be protected against financial-risk, ensuring that the cost of using services does not put people at risk of financial harm

The first and third are automatically covered by the NHI. The second is the cause for concern. For health care to be universally accessible, it should also be efficient. This would require the government to address the performance of the public health sector.


The bill aims to fund the NHI from

  • general tax revenue
  • the reallocation of funding for medical scheme tax credits paid to various medical schemes
  • payroll tax
  • surcharge on personal income tax

The first is simply the existing health care allocation. The 2019 budget allocated R222.6 Billion for health care, second only to Education spending. The second refers to the Medical Scheme Fees Tax Credit (known as MTC) which is a tax rebate for money paid out to a medical scheme. The third is a tax that all employers and employees pay toward medical care, unemployment and social services. The fourth refers to an increase in incomes tax.

Is there enough money?

There is great debate on whether this would be enough money to finance the NHI.

Health Care 3

Source: South African Private Practitioners Forum Response to NHI White Paper

The South African Private Practitioners Forum Response to NHI White Paper compares the unemployment rate in South Africa to other successful UHC systems, claiming that “South Africa has 52% fewer employed people in the population than these countries” claiming that “this creates a major barrier for funding of the NHI through tax revenue, as there are simply not enough people that can pay for the system.”


The Bill will be implemented in two phases. The first phase, which we are currently within stretches from years 2017 – 2022. This phase entails

  • strengthening the health care system
  • developing legislation
  • establishing institutions
  • purchasing personal health care services for vulnerable groups

So far, it is unclear if the South African health care system has been sufficiently strengthened and whether institutions are adequately established. Legislation has been developed, but there have been issues with the consultation of this legislation.

Public consultation for the legislation began on 25 October 2019 in Mpumalanga. Healthcare NGO, Section 27, reported that the hearings in Mpumalanga were

“like an ANC rally, not a public hearing. About 90 percent of the people were wearing ANC regalia; you can’t help thinking that these people came from the branches and from the ANC alliance partners.”

The fourth Mpumalanga hearing, due to sit in Secunda had a last-minute venue change to Ermelo which wasn’t adequately advertised.

Thami Nkosi, Right2Know campaign manager, referred to the Ermelo hearings as a “watered down version of public participation that is an indictment on the ANC and on opposition parties who are not holding the ruling party to account.”

The public consultations, thus far, should raise some concerns about the implementation of the NHI.

The second phase of the NHI is set from 2022 – 2026, which includes the further strengthening of the health care system, mobilising additional resources, and contracting health care services from private providers.

After 2026, the government hopes to fully implement the NHI.


The NHI will be managed by a board which “consists of not more than 11 persons appointed by the Minister who are not employed by the Fund and one member who represents the Minister.” There will be a public nomination of candidates for the board and public interviews. Board members serve for five-year terms, renewable once.

Each candidate needs to meet the following requirements:

  • be a fit and proper person
  • have appropriate technical expertise, skills and knowledge or experience in health care service financing, health economics, public health planning, monitoring and evaluation, law, actuarial sciences, information technology and communication
  • be able to perform effectively and in the interests of the general public
  • not be employed by the State
  • not have any personal or professional interest in the Fund or the health sector that would interfere with the performance in good faith of his or her duties as a Board member
Can we trust the board?

The above board requirements all check out well, but a concern should be the history of political appointments at state utilities which might carry into the NHI board.

“To leave the NHI fund’s governance structure as it is — with the minister given the power to hire and fire every key position — would be a grave mistake,”

states a Business Live editorial, using issues with the National Student Financial Aid Scheme (NSFAS) as evidence. “The legislation that established NSFAS gives the minister the power to hire and fire every key position at board and executive level.”

“There is no indication of who is responsible for preparing the shortlist and the bill is also silent on the criteria for selecting members of the ad hoc advisory body,” the Daily Maverick reported. “The minister also plays significant roles in the appointment of the NHI Fund CEO and the ministerial advisory committees.”

This is not entirely necessary. The South African government could give greater independence to the NHI Board.

The Minister of Health, Zweli Mkhize, is the former African National Congress (ANC) Treasurer-General and had intentions of running to be the next president of the ANC. His connections to the ruling party may influence the governance of the board.

Ultimately, regardless of how progressive the legislation itself is written, equity will only be achieved through effective implementation.

“It is through good governance that the improvement of the quality of life of all citizens and the optimisation of the potential of each will be achieved,”

noted the Constitutional Court in United Democratic Movement v Speaker of the National Assembly and Others. 

So, will it work?

Many pundits, politically-motivated actors, and people with private interest will be swift to claim that the NHI will certainly fail. The major claims are that it cannot be financed and that state corruption will interfere with its implementation.

These are legitimate concerns. The bill in its current form vests immense centralised power to the government and the state’s track record in public health care does not inspire confidence. However, the country urgently does need UHC and the NHI. Perhaps, however, there can be serious doubts about how the present government will implement it.

What can be done?

The NHI Board may be better served as an independent state agency. This means it is created by the state but free from direct governance control. The issue, simply, is that the centralised state may not implement the NHI effectively and therefore fail to provide universal health coverage — to the detriment of the people who need it most.

What can you do?

A strong recommendation is to send a comment on the bill. At a press briefing in Parliament, chairperson of the Portfolio Committee on Health Dr Sibongiseni Dhlomo confirmed that already over 100 000 written submissions have been received on the bill. There are also public consultations occurring across the country. These have already concluded in Mpumalanga and the Northern Cape. On 20 January 2020, consultations will continue in other regions of the country, but a schedule has not been produced yet.

Read the NHI Bill here:

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