The National Health Insurance Bill
Dear Business Partner,
I am sure that by now you will be aware that the National Assembly passed the National Health Insurance (NHI) Bill on the 13th June 2023, after having been in the pipeline now for over 15 years. Many stakeholders in the private healthcare industry are concerned on what the implications are, most notably about the now almost infamous section 33 that will restrict medical schemes to covering only medical care that the NHI does not cover (i.e. complementary cover).
We have assessed the circumstances surrounding the progression of this Bill and where it will go to from here, and we see two main views for consideration in this progression. One is positive for the industry and the other somewhat negative.
Here is our assessment!
The Not So Good News
Starting with the negative, it was regrettable that parliament’s health portfolio committee, that was tasked with assessing public inputs on the NHI Bill, did not consider any of the substantial technical inputs that were provided. Many stakeholders, including medical schemes, hospital groups, health academics, trade unions and civil society organisations, provided very well considered alternatives and positive technical amendments.
Almost exclusively, these were in favour of a multi-payer model (i.e. removing the complementary nature of the NHI Bill), which would largely ensure that the private sector could continue with the reforms outlined within the Health Market Inquiry, as well as development of the low cost benefit options. The overriding and very substantial benefit of this strategy is that the more private sector coverage expands, the less pressure is on government to deliver healthcare services to those not covered privately.
This makes perfect sense from a fiscal perspective, especially given how pressured the government’s finances are currently, as well as from protecting the constitutional rights of citizens and doctors under the Bill of Rights.
The Better News
On the positive side, it should be considered that the NHI Bill still has many years to go before any of its implications will be felt, especially for the private sector. It has already taken a lengthy 15 years to get to a point where just the enabling legislation is being passed – the hard yards for government remain in the future and there are plenty of them.
The next steps are for the NHI Bill to be passed by the National Council of Provinces (NCOP) and they will need to deliberate and consult publicly on it as well. There is some speculation that the NCOP will attempt to pass it within the next year before next year’s national 2024 elections. Several political analysts have commented that this passing of the Bill is merely a political ploy for electoral support in next year’s elections and that afterwards any work on NHI will evaporate.
Bear in mind that since the 2009 national elections, NHI rhetoric has substantially ramped up within the year preceding the election – 2024 will be pretty much the same.
In section 33 of the NHI Bill it also states that medical schemes will only be restricted to a ‘complementary’ role once the NHI is ‘fully implemented’. Nowhere in the pending legislation is ‘fully implemented’ defined, so it is uncertain at what stage of development this will occur,but the term ‘fully implemented’ does indicate that it will be at an advanced stage of the NHI operating which, by government’s own admission, is about 10 to 15 years away.
Practically, there are still many other considerations. To enable the NHI operationally, it requires an appropriation bill from National Treasury to detail how the NHI is going to be funded, and to date Treasury have been very reticent to have any public discussions on this. Treasury’s money bill will require some magic, as government’s finances are heavily constrained and only look likely to worsen in the future.
Additionally, there are no less than 11 other acts of parliament that must be either repealed or amended before the NHI can become operational, eg the Competition Act, Medical Schemes Act, Health Professions Act, etc. Amending 11 acts of parliament will also take some doing.
On constitutional matters, there is already a court case that could have a substantial impact on the NHI becoming operational. One of the 11 pieces of legislation requiring amendment is the National Health Act, which governs something called the ‘Certificate-of-Need’ (CoN). The CoN is a piece of legislation that would dictate to private sector doctors where they are permitted to practice, what health services they can provide and what medical equipment they are permitted to purchase. The government needs this specific legislation in order to control doctors under the NHI plans.
Government intended enabling the CoN last year via new regulations, only for them to have been struck down in June 2022 by the Pretoria High Court after legal action by trade union Solidarity – you can read the details here. The court ruling is now awaiting ratification by the Constitutional Court – if ratified there will be substantial restrictions on government in implementing the NHI.
While we are opposed to many of the technical and restrictive provisions contained within the NHI Bill, we believe that there is still a very long way to go before any of these potentially come to fruition. Successful legal challenges may well alter the substance of the Bill and there is also the prospect of a shift in the political landscape within the next few years towards coalition politics – this may well lead to new health policy or substantive amendments to the NHI.
From this perspective we can assure you that the private healthcare sector will not be materially impacted by the passing of this legislation anytime soon, and we believe that much will change either politically or constitutionally before then, that will change the future outcome for the private healthcare industry.