NHI Fact vs Fiction

This goes back to the overarching question, will the NHI Act be implemented, how will it be implemented and to what extent there is an opportunity to change the NHI direction. We don’t see any current or real implications that will interfere with the membership at Profmed for at least the next decade or longer.

In the design of the NHI and in trying to collect claims from many providers the use of claims management systems will still be required. There are talks of capitation payments being made to a designated group of NHI registered users. It is important to review the Act to determine what the construct will be for providers.

The NHI will specify which hospitals and doctors can be accessed, and patients will need to use the specified referral pathways in order to obtain cover for treatment. Where a person chooses not to follow the NHI pathways, and to use their own doctor or hospital, they will not be able to claim from the NHI.

The NHI Act states that when the NHI is ’fully implemented”, medical schemes will not be able to provide cover for services that are paid for by the NHI. Due to the lack of resources and more especially medical professionals in the public sector, it would be counter productive to the NHI if there is no collaboration with the private sector including medical schemes. Restriction on purchasing the health insurance required is prohibited if a feasible, sustainable alternative is not provided.

Limiting the rights of citizens to purchase additional health insurance, after they have contributed to the NHI, would be globally unprecedented and inappropriate. In virtually every other country with some form of NHI, citizens are free to purchase additional private health insurance cover, including cover that overlaps with services covered by the national system.

We believe, full implementation of NHI remains a long way off – more than a decade at least. During this period, very little to nothing will change in relation to medical schemes.

No. The funds in medical schemes are contributed voluntarily by members mostly from their after-tax earnings. The money therefore belongs to the members and there is no mechanism to use these funds because they are well protected by law. The funds are protected and managed by the medical schemes which are effectively trust funds, functioning as “mutuals” and managed by Trustees elected by medical scheme members to manage these funds on their behalf.

No. The NHI Act does not affect the level of any taxes. Only National Treasury can introduce legislation that changes taxes and no Money Bill has been proposed as yet. This would need to go through the full legislative process before there would be tax changes.

The NHI will have no immediate impact on taxes. The mechanism for funding for the NHI is not defined in the NHI Act and substantial work is still required to determine how the NHI will be funded. Additionally, once the Money Bill has been defined, this would need to go through the full legislative process before it can be implemented.

According to the NHI Act, medical schemes will continue to exist alongside the NHI, and will provide funding for treatments and medicines that the NHI does not pay for, providing what the Act refers to as “complementary cover to services not reimbursable by the Fund”. This arrangement will only come into effect once NHI is fully implemented, as determined by the Minister of Health through regulations in the Gazette.

This means that for the foreseeable future, medical schemes will continue as they currently do. It is expected that the role of medical schemes will evolve incrementally as NHI is rolled out. This view is also supported by Section 57 of the Act which amongst other things states that National Health Insurance will be gradually phased-in using a progressive and programmatic approach based on financial resource availability (Section 57 1 (b), NHI Act).

We believe that implementation of the NHI will take several years – likely decades. We therefore do not expect any material impact on medical schemes in the near future.

No. The NHI will take many years to be established after the Act has been passed into law, and it will be a long time before the NHI will be funded and what services it will reimburse. It is important to bear in mind that healthcare needs are often unexpected and can involve very large expenses, and so cancelling your medical scheme is a serious risk to you and your family’s physical and financial wellbeing. The NHI package of benefits is also unlikely to cover the extent of the benefits that medical schemes currently cover and certainly not the existing package of prescribed minimum benefits that all medical scheme benefit options are required to cover.

No. The NHI Act will not have an immediate effect on medical scheme benefits. Medical schemes will only be required to change their benefits once the NHI is fully implemented. As the implementation of the NHI will take several years – likely a decade or more – there will be no impact on medical schemes for the foreseeable future.

The Act envisages that the NHI Fund will contract on a voluntary basis with private hospitals and professionals and other medical service providers to supplement the current public sector delivery system. We expect that the NHI will contract with some GPs to supplement its public primary care services, and that it will contract for certain specialized services to address specific gaps in public sector which may include oncology, renal dialysis. It is expected that the NHI services will continue to be delivered by public sector clinics and hospitals, and that private hospitals, specialists and other providers will continue to be funded by medical schemes.

No. South Africa’s constitution protects the rights of individuals to determine who they want to contract with and the terms will need to be sustainable. The level and extent of the NHI package also remains very uncertain, as well as the extent of the funding that will be required and how this will be raised in a sustainable way. In light of this uncertainty regarding the funding available for the NHI and the benefits that will covered under the NHI, it is unclear whether contracting with the NHI will be commercially viable for doctors.

The NHI will be rolled out in two phases. Phase One (up to 2026) will focus on infrastructure and other foundational elements. The funding model of the NHI will also be defined and confirmed during Phase One. Phase Two (2026 to 2028) will focus on the actual rollout of the NHI, intensive conclusion of the implementation phases and ironing out of any issues or areas of concern.

The NHI is a huge and complex initiative with a considerable amount of planning and debate still required to make it workable. Profmed and other medical schemes through our association with the Health Funders Association are poised to challenge the Bill constitutionally and we have secured leading human rights and constitutional lawyers, to take up the fight and protect every medical scheme members right to access healthcare.

These challenges will enable the retention of medical scheme benefits for members in the long term, if not indefinitely. Although we cannot pre-empt the outcome of the anticipated legal challenges to the Bill, we feel confident that the courts would come to a favourable conclusion regarding the continued role of medical schemes alongside a workable and amended NHI.

A study conducted two years ago broadly revealed that about 35% of the population expressed concern over the implementation of the NH) and would contemplate exploring opportunities globally. The trend of individuals seeking international opportunities is on the rise.

Section 49 of the National Health Insurance Act discusses the primary sources of income and how the NHI will be financed, including an additional tax for the NHI. This section mentions the need for a money bill, which is a piece of legislation that addresses the financial aspects of the NHI. This bill is separate from the current Act but will provide the necessary funding that must be approved by parliament. However, this bill has not yet been prepared.

Yes, we prioritise our members’ interests and will persist in equipping members with accurate information regarding the NHI implementation.

As part of Profmed’s constitutional challenge, we aim to demonstrate and highlight to the constitutional court that the government has not taken into consideration alternative models that uphold constitutional rights.

Section 49 of the National Health Insurance Act discusses the primary sources of income and how the NHI will be financed, including an additional tax for the NHI. This section mentions the need for a money bill, which is a piece of legislation that addresses the financial aspects of the NHI. This bill is separate from the current Act but will provide the necessary funding that must be approved by parliament. However, this bill has not yet been prepared.

Numerous elements need to be altered, including the funding model, the status of hospitals, the establishment of primary care units, and user registration. It wouldn’t make sense for the government to just implement NHI. The Minister must announce in the gazette as a Regulation when the NHI has been fully implemented. Only at that point will medical schemes be impacted.

We need to find a practical approach to enhance healthcare for the entire country. We must ensure policy certainty and make the most of all the resources at our disposal. A close collaborative relationship between the private and public sectors is essential.

The Act does not provide a clear answer to this, and we are waiting for the implementation plan or the Regulations that are to be promulgated. We will need to closely monitor the terms and conditions, as well as the accreditation and contract between the service providers and the NHI fund.

The NHI directorate plans to begin with the Regulations sections that deal with the appointment of the Board and the Chief Executive of the NHI fund, and later move on to the Regulation section. While it is technically possible, it’s not practical considering all the steps required for the NHI to be fully realised according to the Act. There’s a significant amount of groundwork that needs to be done, and even the government has stated that it would take decades for the NHI to be fully implemented. We can expect to see a gradual implementation process.

The initial expenses associated with the constitutional challenges were projected to be around R8 million. However, since we are a part of the HFA, which represents 16 medical schemes and 4 large administrators, the cost will be distributed across all schemes, amounting to approximately R8 million. For this reason we decided to consolidate and appoint the Senior Counsel.

Yes, you have the option to choose a private hospital, but the costs will have to be covered out-of-pocket and cannot be insured against. This aspect is the main focus of the constitutional challenge.

The risk lies in implementing the NHI in its present form without adequate consultation to ensure that it can provide improved healthcare for everyone. The best-case scenario would involve leveraging the strengths of both the public and private sectors to increase overall healthcare capacity.