National Health Insurance in South Africa

National Health Insurance in South Africa
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A healthy population is an asset to a nation, so it makes sense that the South African (SA) Government is aiming to reform our current public health system to emulate the best-performing health systems elsewhere in the world.

What exactly is involved, and how will the current private versus public health care system be affected?

It all starts with the Law…

The Minister of Health published the National Health Insurance Bill, which recently has been passed by parliament.. The next step is for the president to sign and promulgate the bill and make it an Act of Parliament. Once signed into law, the Bill will establish a National Health Insurance Fund (NHI) whose objective is to improve the accessibility of healthcare for all South Africans.

The role of private medical schemes under the NHI Bill

The NHI Bill states that once the NHI is fully implemented, private medical schemes will no longer be permitted to provide cover for services that are paid for by the NHI. However, at this stage it’s not clear what that will look like in practice.

What happens to private hospitals and healthcare professionals?

It is expected that the vast majority of NHI services will continue to be delivered by public sector clinic and hospitals, and the private hospitals and specialists will continue to be funded by medical schemes.

Where will the money come from to fund the NHI?

The Bill specifies that payroll taxes and a surcharge on personal income tax may be considered as potential sources of income.

The funding of NHI will have no impact on scheme members’ savings accounts nor on the reserves of medical aid schemes as these funds belong to the members and cannot be accessed for the NHI. The only mechanism government can use to fund the NHI would be to raise additional funding via the taxation system.

What happens now?

It’s really too soon to tell what the effect of the NHI Bill will be, as it may go through numerous changes and look drastically different by the time it is implemented.

Similarly, the NHI Fund will take years to be established after the Bill has passed into law, and it will be a long time before we really understand how NHI will be funded, what its budget will be and what services it will reimburse.

We will continue to monitor these developments and keep you abreast of changes that may affect you.


By Jaco Hartman, CFP®
B.Com