Business lobby group Sakeliga has taken legal action against the National Health Insurance (NHI) Act, arguing it is unaffordable and unviable in SA’s economic climate.
The group has asked the Pretoria high court to declare the act unconstitutional and invalid, and to set it aside.
The government would need an extra R500bn a year to implement NHI, requiring an “unthinkable” 30% increase in income tax rates, said Sakeliga, citing research commissioned from the economics consultancy PriceMetrics.
“Having recently witnessed the backlash and resistance to just a two percentage point proposed increase in VAT in the 2025 national budget, the tax increases required to fund the NHI are a nonstarter,” it said in a statement on Wednesday.
The 2025 budget was twice delayed due to a protracted fight in the government of national unity over finance minister Enoch Godongwana’s plans to raise VAT, which was eventually only increased by half a percentage point this year.
Sakeliga said there was no viable way to finance NHI. “If the government tried to fund the NHI out of existing taxes and borrowing, it would have to make debilitating cuts to other government services and spending obligations, and raise government borrowing from already unsustainable levels, precipitating fiscal collapse and severe financial and economic harm,” it said.
Our case is a comprehensive defence against the nationalisation of healthcare.
— Russell Lamberti
Sakeliga executive director
Sakeliga is the seventh organisation to take aim at the NHI Act, which seeks to realise the ANC’s plan for universal health coverage with extensive reforms to SA’s health system. NHI envisages a system in which all healthcare services are paid for by a single government-controlled fund, which will replace the multiple funds in play now. These include more than 70 medical schemes, nine provincial health departments and health insurers.
Trade union Solidarity and organisations representing medical schemes, doctors and specialists have also launched legal action against the controversial legislation, which was signed into law by President Cyril Ramaphosa in May 2024 but has yet to be brought into effect.
“Our case is a comprehensive defence against the nationalisation of healthcare,” said Sakeliga executive director Russell Lamberti.
“What we are adding is more credible evidence of the cost of NHI. Showing its economic implications and the sheer scale of the harm [it will do] is very important,” he said.
PriceMetrics’ analysis concluded SA lacked the means to implement a single payer system, he said. “They are in a completely different league — the difference is stark,” Lamberti said.
PriceMetrics’ report includes an analysis of 16 countries that had implemented a single payer system and concluded SA fell short of the human, financial and governance resources necessary to maintain such a system. SA’s GDP per capita was 17% of the median of the countries surveyed, while total employment was half the median, it found.
“Fiscal capacity is far below what is necessary in single-payer systems,” it said.
In its application, filed on Wednesday, Sakeliga asks the court to declare the act unconstitutional on the grounds that it is not rationally connected to its purpose.
It also contends the act breaches section 27 of the constitution, which says everyone has the right to healthcare services and that the state “must take reasonable and other legislative measures, within its available resources, to achieve the progressive realisation” of these rights.
The act is at odds with these constitutional provisions because the state lacks the resources required to implement NHI, and because it will result in a regression in health services, Sakeliga says in court papers.
Alternatively, it asks the court to scrap any sections of the act that it finds to be unconstitutional.
Sakeliga cites the ministers of health and finance, the president, the speaker of parliament and the National Council of Provinces as respondents.
Update: August 27 2025
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