President Cyril Ramaphosa has signed the National Health Insurance (NHI) Bill into law, setting in motion the government’s fiercely contested plan for universal health coverage and prompting immediate legal challenges from trade union Solidarity and civil rights organisation AfriForum.
The president’s move comes just two weeks before a general election that is widely expected to see the ANC lose its majority for the first time.
“The NHI is a commitment to eradicating the stark inequalities that have long determined who receives adequate healthcare and who suffers from neglect,” he said at a signing ceremony at the Union Buildings in Pretoria on Wednesday.
“The financial hurdles facing the NHI can be navigated with careful planning, strategic resource allocation and a steadfast commitment to achieving equity,” he said.
Solidarity sent a letter of demand to the president minutes after he assented to the legislation, and said it would challenge the NHI Act in court unless the president agreed to repeal it. It has given the president until next Thursday to do so.
AfriForum also delivered a letter of demand to the president, saying it would institute a class action.
The DA, organisations representing healthcare professionals, and industry bodies for medical schemes have indicated they too intend to litigate but have yet to put their legal challenges into play.
While signing the bill is politically significant for the ANC, it does not immediately change the status quo as none of the mechanisms required to implement the ambitious scheme have come into effect. Medical schemes will, for now, continue to provide cover for private healthcare services, and patients will be required to pay out of pocket for private care if they are uninsured.
Health minister Joe Phaahla urged medical scheme members to retain their cover, saying NHI would take time to implement. “Please don’t throw away your medical scheme and don’t stop your stop order,” he said at a media briefing.
The Board of Healthcare Funders, an association for medical schemes and administrators, said its members had expressed concerns about large numbers of calls from beneficiaries asking if they could forfeit their cover once the bill was signed.
The NHI Act is the first piece of enabling legislation for sweeping reforms aimed at scrapping SA’s two-tier health system, which sees 85% of the population largely dependent on crowded and dilapidated public health facilities while a minority can afford access to private healthcare services funded by their medical scheme premiums.
“The inequities and inequalities that characterise our health system are unjustifiable and require fundamental overhauling,” said Phaahla.
The NHI scheme is based on social solidarity principles in which the rich and healthy subsidise the poor and sick, with healthcare provided free at the point of delivery regardless of a patient’s socioeconomic status.
Under NHI, a government-controlled fund will purchase services for all patients from public and private providers. Medical schemes will be banned from covering services provided by the fund.
The next step will be for sections of the bill to be proclaimed by the president, which he will do in consultation with the minister. This can be a slow process: sections of the National Health Act, signed 20 years ago, have yet to be promulgated.
The government will need to establish the governance structure for the NHI fund, accredit service providers and register beneficiaries before it can start providing free services to patients under the scheme. It will also need to introduce measures for financing the fund, which have yet to be determined.
Business organisations have previously said the government’s estimate that it will need to raise an extra R200bn in tax revenue to finance NHI is unrealistic given SA’s narrow tax base and weak economic growth. Raising this amount of money would require increasing personal income tax by almost one-third, raising VAT from 15% to 21% or applying a payroll tax that is 10 times higher than current UIF contributions.
Critics of the NHI Bill ranging from organised business to healthcare professionals say they support universal health coverage, but the legislation is unconstitutional, unworkable and leaves the NHI fund open to corruption. They say implementing the legislation in its current form will damage the health system, the economy and investor confidence.
Update: May 15 2024
This story has been updated with new information.
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