Council of Provinces passes NHI Bill

by | Dec 7, 2023

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The new Bill, which is expected to decimate the healthcare service industry, now only awaits the President's signature for approval

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The National Health Insurance (NHI) Bill in South Africa, aimed at reforming the health system, has been approved by the National Council of Provinces. The bill seeks to provide all South Africans with access to quality healthcare services through a national insurance plan, establishing a fund to cover most treatments from accredited providers.

Private insurers can only cover services not included in the fund. Despite opposition from various groups, the bill’s approval without modifications sets the stage for potential legal challenges, citing concerns about eroding constitutional rights and insufficient consideration of input from stakeholders.

Critics argue that the government has not clearly outlined how it will raise the estimated required funding of up to R500 billion. Legal action is anticipated, with labor union Solidarity expressing plans to challenge the bill’s implementation. The proposed NHI scheme’s cost model has not been updated since the 2019/2020 financial year.

Tax increases would be required, raising concerns about the country’s already high tax burden, small tax base, and substantial public debt. The National Treasury and the Davis Tax Committee have previously warned about the unaffordability and sustainability of NHI costs, emphasizing the need for caution.

There are fears that NHI taxes might not be exclusively allocated to NHI purposes, posing a risk of mismanagement. The implementation of NHI could also lead to a departure of health professionals, anticipating destabilization of healthcare and concerns about comprehensive controls over fees and treatment decisions.

The application of Broad-Based Black Economic Empowerment (BEE) preferential procurement rules for NHI raises concerns about potential inflated pricing and defective delivery, similar to past projects.

Business groups have also expressed opposition, planning to petition President Cyril Ramaphosa to refer the bill back to the National Assembly for amendment, citing concerns about its workability, affordability, and constitutionality. The bill now awaits the president’s decision on whether to sign it into law or request amendments.

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