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National Health Insurance

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The National Health Insurance (NHI), for which membership will be compulsory, is a funding scheme that aims to address healthcare inequity in South Africa. The scheme will do this by creating a fund that the government will use to buy healthcare services at set fees from accredited public and private health providers. The NHI Act was signed into law on 15 May 2024 but before it will come into effect, Parliament will need to enact further legislation (including ones providing for its funding).

HomeArticlesHave questions about the National Health Insurance? We answer them

Have questions about the National Health Insurance? We answer them

As Health Minister Aaron Motsoaledi prepares to unveil the National Health Insurance (NHI) Bill today, we tell you what you need to know about.

What is the National Health Insurance? 

The NHI will pool private and public funding to provide better and more equal healthcare for all South Africans. The government will become the only large-scale purchaser of healthcare services from private and public providers. By doing this, Health Minister Aaron Motsoaledi says the government will be able to set prices for health services and also negotiate better deals as it buys larger quantities of, for instance, medicine. The NHI will be rolled out in stages and the minister says it will be complete by 2025.

Why do we need an NHI? 

Eighty-three medical aids operate in South Africa, according to the Council for Medical Schemes’ latest annual report. The proliferation of medical schemes has created what’s been called a two-tiered system of health: one for the rich and another for the poor. 

Motsoaledi elaborated at the launch of the NHI white paper last week: “About 80% of doctors in this country serve only 16% of the population, [and] the remaining 20% of doctors must serve the rest. How can you expect not to have long queues [in the public sector]? The NHI must make [these doctors] available to the rest of the population.” 

Doctors will still be allowed to practice privately but will have to see public patients at NHI rates. “People must appreciate that we want to be a nation where equality, social justice and social solidarity are the order of the day.”

If you have a medical aid, will you lose it under the NHI?

Not necessarily. Even government admits that “irrespective of how comprehensive the NHI entitlements will be, some personal healthcare services will not be covered”. So while you’ll have to pay into the NHI, medical aids will continue to exist, but in a different form: they will offer complementary health coverage or access to services you may not be able to get through the NHI. 

In the post-NHI era, you will likely buy this kind of top-up cover from fewer medical schemes offering fewer products, but you’ll still benefit from government-negotiated prices. “Obviously, there will be some services the NHI won’t cover. Say you go for plastic surgery. It’s your choice, [but] that surgeon will still charge you NHI rates,” Motsoaledi said. 

But the public health service is in a shambles, so how can this work?

Motsoaledi says there are two myths about the NHI — that the country can’t afford it and that we should be imagining an NHI built on the public and private health systems as we know them today. “This is a significant policy shift. It necessitates a massive reorganisation of the healthcare system. That reorganisation is already taking place.” 

Concurrent with introducing the NHI, the health department has tried to reform the weak public health system and its pricey counterpart, the private sector. As part of this “massive reorganisation,” government has, for instance, tried to kickstart community and clinic-based services to catch illnesses early and prevent the need for more expensive treatment later. 

In 2014, the Competition Commission launched a probe into private healthcare — a move many believed was an attempt by the government to unravel the drivers of high private healthcare costs ahead of moves to buy services from the sector. 

Will I be able to choose my doctor or my health facility?

Yes, but there will be limits. The white paper says patients will be allowed to “choose a health provider or facility for treatment” as long as their choice doesn’t go against standards or guidelines. 

But if you want to go to a GP for a cold, you may end up at the nurses’ station first. The NHI — like some medical aid schemes — will try to curb unnecessary costs, so you’ll need a referral to see that ear specialist. It also means that, like medical aid schemes, an expert committee will have to approve any requests for treatment outside of standard guidelines. 

How will the government pay for all this?

That’s the billion-rand question in South Africa and the world over as more countries move towards universal healthcare coverage. Under the NHI, money would be channelled into a single fund to pay for healthcare and this would be governed by a board, which reports to the health minister and Parliament. 

Among the first cash injections into the fund is one likely to come from the scrapping of about R20-billion in annual medical aid tax credits. Next, expect payroll and surcharge taxes, says the white paper. 

In 2016, the country spent R355- billion on health, publicly and privately, the document states. 

The white paper estimates the NHI will cost R256-billion by 2025, so our bills should be covered, right?

Maybe. NHI cost projections have been criticised for using outdated cost bases and growth projections. The white paper predicts a deficit of R27.6-billion by 2025 even under a best-case economic growth scenario. The affordability of NHI is likely to be the biggest question as we head towards healthcare for all.

Laura Lopez Gonzalez is a freelance health journalist and editor. She was Bhekisisa's news editor, then deputy editor between 2016 and 2020.