The NHI: What’s the latest?

The onset of the COVID-19 pandemic has placed our collective health front and centre as a priority in South Africa – as well as in the wider world.

The virus has certainly highlighted our health system’s shortcomings, especially in provinces such as the Eastern Cape. But it has also shown us that the private- and public healthcare sectors can collaborate effectively when pushed to, for the benefit of all. But is the National Health Insurance (NHI) still going ahead? When, how, and what?

Here’s the latest news:

What is the NHI?

According to the Government website: the NHI is “a health financing system that is designed to pool funds to provide access to quality affordable personal health services for all South Africans based on their health needs, irrespective of their socio-economic status”. The Government’s aim is to ensure that getting access to adequate health services does not result in financial difficulties for people.

Government steps to get there

Health Minister Dr Zweli Mkhize confirmed in July via a virtual parliamentary briefing that the government was pushing ahead with plans to implement NHI. They had begun to engage with key stakeholders (including the National Treasury and the Development Bank of South Africa) to develop plans to help speed up the implementation of the programme. In September, parliament’s Health portfolio committee met to discuss next steps, which would allow them to introduce the new NHI bill.

When will it happen?

With the Coronavirus delaying everything this year, you may be wondering if it will slow down the NHI too. The Government website says that the NHI is being implemented in phases over a 14-year period starting in 2012, with Ramaphosa confirming in February of this year that they will aim to roll it out and cover the whole country by 2025. This will happen in a staggered approach, not all at once.

Where will the money come from?

Total expenditure on health currently in SA is around R450-R500 billion per year, which is about 9% of our GDP. In terms of where the money will come from to finance the NHI, all of it will come from tax revenue.

This will include the following methods:

  • General tax revenue, including transferring funds from the provincial equitable share and conditional grants into the NHI fund.
  • There will be additional taxes, either an income or payroll tax and/or a VAT tax which will further fund the NHI.
  • People who buy medical aid currently get a tax credit from Government which subsidises their healthcare, but once the NHI rolls out, these credits will be cancelled, meaning that medical aid will become more expensive.

The National Treasury previously estimated in a white paper that the cost of the NHI would be around R256 billion per year (this was at 2010 prices though), but they have since admitted that this was not accurate, and that this figure is set to change after the publication of a revised bill

Tech to play a large role

The use of technology will apparently be pivotal to the implementation of the NHI, with Mkize saying: “Covid-19 has illustrated just how important data and information are in managing health decisions”. The roll-out of the Coronavirus tracing app is one indication of how the government is taking the role technology can play seriously, in terms of trying to safeguard our nation’s health.”

While the country recovers from the effects of this pandemic both economically and socially, it’s very certain that we have never appreciated our health more than we do right now. A universal healthcare system sounds excellent in principle, the questions remain whether practically it can achieve what it set out to do; and whether the overburdened South African taxpayers will be able to foot this enormous additional bill. Only time will tell.

What are you thoughts?

Until the next time.

The Wise About Life Team

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