National Health Insurance as incorporated in the NHI Act, is really an investment in the healthcare of the country’s citizens. President Cyril Ramaphosa signed the NHI Act into law last week and medical scheme provider Discovery’s shares fell by 8%, briefly making people wonder if the Act is also an investment issue.
“However, even under the assumption that the legislation is not challenged in court, it is unlikely to be rolled out soon. In an interview in 2022, Dr Nicholas Crisp, deputy director general at the department of health, said anything between 14 and 20 years would be a good time. Our view is that it will probably take longer.”He also points out that Crisp mentioned in his interview that Japan took 34 years to implement its equivalent, while other countries took even longer.
“Another constitutional issue raised was the right to freedom of choice and a citizen’s right to healthcare and choice related to the healthcare provision. Discovery Health mentions the limitation of this right being similar to a limitation on South Africans’ choice to ‘purchase additional security or private schooling’ under the premise that security and schooling are already covered in the national system.
“The view shared indicated that at least three provinces expressed issues with the NHI Bill. Minutes of the NCOP meeting on 6 December 2023 indicate that eight provinces supported the Bill, with one opposing. The private sector also made various submissions to parliament and the presidency challenging the legislation as flawed and impractical.
“National Treasury expressed a view in the February 2024 budget that South African taxes are already elevated and bracket creep would be the main mechanism for increasing tax collection.”Analysis by Moonstone and Discovery concluded that the funding for NHI stands at approximately R200 billion a year, which is the equivalent of just under 10% of the state’s tax revenues of R2.155 trillion in 2023/2024.