Redirecting the medical scheme contributions of public servants to the National Health Insurance (NHI) fund will need careful management as it will require changing their conditions of service, delegates to the annual Board of Healthcare Funders (BHF) conference heard on Tuesday.
The BHF is an industry association for medical schemes and administrators, which between them cover about half SA’s market.
Any changes flighted by the government to the generous medical scheme benefits provided to civil servants are expected to run into stiff opposition, as they are a prominent feature in wage negotiations. The latest three-year wage agreement, for example, includes an increase to the medical scheme subsidy of medical price inflation plus 0.5%. Medical inflation usually outstrips consumer inflation by several percentage points, making the state’s increase more generous than those typically accorded by private sector employers.
NHI is the ANC’s plan for universal health coverage, which aims to ensure all eligible patients are provided with care that is free at the point of delivery, regardless of their socioeconomic status. Its first piece of legislation, the NHI Act, was signed into law by president Cyril Ramaphosa last May but has not yet been brought into effect.
The policy underpinning the act is set out in the NHI White Paper. It proposes shifting the employee contributions and employer subsidies for members of Polmed, Parmed and the Government Employees Medical Scheme (Gems) into the NHI Fund, which is to purchase health services for patients.
The support of key public sector unions, which had been vocal in their support of NHI, could assist the process, said Clinton Health Access Initiative senior country adviser Vishal Brijlal. SA’s biggest trade union federation, Cosatu, a member of the tripartite alliance and a staunch supporter of NHI, includes unions for teachers, nurses and the police.
“The minister of health has since 2014 been saying we need to see consolidation of civil servants’ medical schemes into one structure. If you did, a sizeable amount could be reprioritised into what would be the start of NHI,” Brijlal told conference delegates.
In 2022 the combined medical scheme contributions from the government and its employees ran to R60.18bn. Another R6.24bn in medical scheme contributions was paid on behalf of those working for local government, and R1.08bn for those employed by parastatals, said Brijlal. Scrapping medical scheme tax credits — which were provided to all medical scheme beneficiaries — could free up another R30bn, he said.
Polmed is restricted to members of the SA Police Service and their dependents, Parmed is reserved for MPs and judges, and Gems is available to state employees such as teachers, doctors and nurses. The state provides generous subsidies — members of Polmed, for example, have to stump up just 25% of their monthly contributions — and the schemes restricted to state employees provide some of the richest benefits on the market. Polmed has been lobbying to be exempt from NHI, arguing that the police should be granted the same dispensation as members of the military and the state security agency. Polmed wrote to Ramaphosa in 2023 appealing to him not to sign the NHI bill into law.
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