We are writing to update you on important developments in relation to the National Health Insurance (NHI) Act.
The Health Funders Association (HFA), which represents our Scheme and 19 other medical schemes and administrators covering over 4.1 million South Africans, has launched a legal challenge to the NHI Act. While HFA fully supports the goal of achieving universal health coverage (UHC) through public / private collaboration it believes that the NHI Act is unaffordable, unworkable and unconstitutional.
This challenge follows many years of good-faith engagement with government, including detailed submissions, consultations, and direct attempts to engage with both the Minister of Health and the President. Unfortunately, these efforts did not result in meaningful changes to the Act, leaving HFA no option but to seek legal intervention.
To support its case, HFA has assembled a highly respected legal team led by Senior Counsel Advocates Wim Trengove SC and Adila Hassim SC, both of whom are widely recognised for their expertise in constitutional and health law. Their involvement underlines the importance of the case and the potential impact of the NHI Act on all South Africans.
HFA also commissioned a comprehensive financial and economic analysis from Genesis Analytics. Genesis is a firm which recognises inequalities in the current healthcare system and the need for extensive reform. Against this backdrop, the firm was instructed to perform an independent and objective technical analysis to estimate the likely efficiency, cost and service outcomes of NHI. It was also asked by HFA to compare NHI, including its anticipated prohibition of most forms of private health insurance, to systems in other countries such as South Africa’s middle-income peers. Finally, Genesis was requested to identify measures that would improve the affordability of NHI and its impact on medical scheme members.
Their modelling shows that implementing the NHI as currently envisaged would require either unsustainable increases in personal income tax – nearly doubling average tax rates – or a significant reduction in healthcare benefits. Medical scheme members, in particular, would pay substantially more in tax while receiving much less access to care.
The analysis also identifies wider economic risks, including pressure on South Africa’s narrow tax base, reduced consumer spending, and the possible emigration of skilled healthcare professionals. It is further estimated that over 286,000 additional healthcare workers would be needed to deliver the NHI’s promised services, an unrealistic short-term goal that would place considerable pressure on the system.
One of the most concerning elements of the NHI Act for medical scheme members is that it prevents individuals from purchasing private medical scheme cover for services that the NHI claims to provide – even if those services are not practically available. This would limit your ability to use your own funds to access care and significantly reduce your healthcare choices.
A more workable alternative
HFA is not pursuing legal action in order to maintain the status quo, but out of concern for the broad negative consequences the NHI Act, in its current form, will have on the country. Instead, it has proposed a hybrid, public-private funding model that allows the NHI Fund and medical schemes to operate alongside each other, an approach that mirrors successful UHC systems internationally. This model ensures a common benefit package for all South Africans while preserving individual choice and encouraging innovation, efficiency, and sustainability.
HFA’s goal is to support meaningful reform that strengthens public healthcare, improves access, and delivers long-term value for all, without compromising current access to healthcare.
The legal process
As you may be aware, several organisations, in addition to HFA, have launched legal challenges against the NHI Act. In response, the Minister of Health has proposed that these cases be consolidated, suggesting that it would be more efficient and cost-effective to manage them together and would help avoid conflicting outcomes, especially as some of the legal issues have already been raised before the Constitutional Court.
HFA is actively engaging with the Deputy Judge President to ensure that its case is properly considered and appropriately managed within this broader legal process.
A call for calm and continuity
While the NHI Act has been signed into law, it has not yet been proclaimed, and its implementation is not imminent. In fact, the Minister of Health has indicated that implementation will take at least 15 years. HFA’s legal challenge is one of several currently before the courts, and the constitutionality and feasibility of the Act will need to be fully considered before any material steps can be taken toward implementation.
In light of this, we wish to reassure you that your medical scheme cover is secure and that HFA, with our support, is acting firmly in your best interests to safeguard your access to quality healthcare, both now and in the future while also ensuring expanding access to quality healthcare for all in South Africa.
For more information on HFA’s NHI court challenge and alternative proposal, please visit HFA’s website at www.hfassociation.co.za.
Kind regards
Principal Officer and Chief Executive
Craig Comrie
