How will the new NHI Bill affect your medical aid?

On May 15th 2024, President Cyril Ramaphosa signed the National Health Insurance (NHI) Bill into law. The aim of the Bill is to unify public and private healthcare into a single framework to facilitate more equitable medical access for all South Africans.

This ambitious Bill marks a significant shift in the South African healthcare landscape, and it’s likely to have a significant impact on both the private and public healthcare sectors within the country. So, what does the NHI Bill mean for the average South African – especially those who already have private medical aid in place?

The new healthcare plan will take time

Keamogetswe Masimong, Cornerstone’s Healthcare Operational Manager, says that the new healthcare plan will require significant resources to implement. “Above all, it will take substantial investment to elevate public facilities to private standards, and its actual implementation will take many years as many current public health institutions need significant upgrades.” However, Masimong says that the uncertainty around state liability for private sector services and potential legal challenges from medical schemes highlights the necessity for a workable NHI.

The role of medical aids in future

In terms of how the Bill will affect medical aid schemes, Section 33 of the NHI Bill states that when the NHI is ‘fully implemented”, medical schemes will only be able to provide complementary services that aren’t provided for by the NHI. This brings into question the future role of medical schemes once the NHI is established – and there’s an understandable degree of anxiety among South African medical aid members as a result.

Adrian Gore, CEO of Discovery Limited, says that limiting the role of medical schemes would be counterproductive to the NHI. “There are simply insufficient public health resources to meet the needs of all South Africans,” he says. Discovery also feels that taking medical aids away holds other risks too, including taking away critically needed skills and eroding local and international investor sentiment and business confidence.

Damian McHugh, CMO at Momentum Health Solutions, says that the NHI Bill in its current format is not sustainable.“We expect the already documented challenges made by numerous stakeholders to become more vocal, particularly around the constitutionality of the Bill,” he says. “Another key consideration is that the South African economy does not have the required funds to support the implementation thereof.”

Collaboration is key

Based on this, McHugh says that the current private and public system should collaborate to better utilise the experience and infrastructure of the private industry to augment the public offering. It will also ensure that South Africa doesn’t lose critical experienced resources from the country’s health economy.

However, the key point to remember is that the full implementation of the NHI is still far into the future, and that even when it is completed, it’s unlikely to have sufficient funding to provide an extensive package of benefits – which means medical aid will still be able to provide cover for them.

South Africans will face more taxes

In the meantime, Business Tech reports that the NHI Bill means it’s even more likely that South Africans will be triple taxed for adequate healthcare in South Africa. Besides paying income tax and VAT, they will now also face NHI surcharges and payroll taxes, as well as paying their medical aid “grudge tax” in order to get comprehensive health coverage.

The NHI Act represents a monumental step toward achieving universal health coverage in South Africa. While its goals are commendable, the practical implications in terms of financial sustainability and the impact on the private sector are a concern. At Cornerstone, we’re committed to providing advice and support as South Africa navigates this complex transition. Our focus remains on ensuring that all South Africans have access to quality healthcare, supported by a robust and sustainable health system.