Every time someone in government proposes a change on a national level, everyone starts panicking and yelling about how we’re all doomed.
The general response to land expropriation without compensation is a good example of this.
In an attempt to fend off this overreaction to the proposed National Health Insurance Bill, let’s look at what it takes to pass a bill in South Africa.
A bill (or a draft bill, rather) is introduced in Parliament by a minister. In this case our Minister of Health, Zweli Mkhize, proposed a National Health Insurance bill which would provide South Africans with universal healthcare.
Before a bill can become law it has to be considered by both houses of Parliament. Some bills are introduced in the National Council of Provinces (NCOP). In this case, the bill was introduced at the National Assembly.
It then goes to a committee, and then it’s published in the Government Gazette for public comment.
Once it has decided on its version of the bill, the committee submits it to a sitting of the house for further debate and a vote. A bill could be referred back to a committee for more work before a vote is taken.
The bill is then referred to the other house for its consideration. If the bill passes through both the National Assembly and the NCOP, it goes to the President for assent.
If the president approves, he signs the bill and it becomes an Act of Parliament.
All of this takes a long time.
The point I’m trying to make is that it’s a good idea to understand what is being proposed and how it might affect the country, but panic is useless at this stage as nothing is happening immediately, and the final draft of the bill could look completely different.
With that in mind, take a deep breath before we go over to BusinessTech, who asked Michael van Vuren, a partner at the law firm Fasken, to answer some of the more pressing questions about the bill.
You can read his full responses, here.
Here’s the shortened version:
Is NHI compulsory?
The short answer is yes.
An NHI Fund is to be established as a single purchaser and single payer of healthcare services in South Africa.
Stated plainly, it is akin to a very big state-run medical scheme or insurer, but without competitors. So it is like SAA without Comair or Safair, GEMS without Discovery.
If you are currently a member of a medical aid scheme, the common practice is for you to choose a doctor, hospital or specialist, and the medical aid will reimburse you or pay the bill directly.
Under NHI, the Fund purchases the health care service “on behalf of the user” (mainly South African citizens and permanent residents) at accredited healthcare providers free of charge at point of care.
The Fund will also determine the payment rates for services and “must negotiate the lowest possible prices for goods and health care services without violating applicable law”.
The NHI will be a national entity like the Road Accident Fund, SA National Parks, Eskom, SABC and SAA.
Almost every single one of those is a complete mess, so I understand the apprehension on that front.
I have medical aid – what happens to it?
Medical schemes will be limited to only providing cover for health services not covered by the Fund.
It’s a form of ‘gap cover’.
Services covered by the NHI
There is currently no information about the specific services that the NHI will cover.
The bill does envisage a formulary and a Benefits Advisory Committee, who in consultation with the Minister and the board of the Fund, will determine the benefits provided by the Fund.
Section 8 of the bill states that a user will be personally liable for (a) treatment not included in the formulary, (b) services that are not medically necessary and (c) services due to noncompliance with the referral pathways.
As mentioned earlier, it’s going to take a while before the bill reaches its final form.
Who Pays for the NHI?
The main source of revenue for the Fund will be your taxes.
According to reports, National Treasury will sometime later provide a revised costing to the one they produced for the White Paper in 2017.
The White Paper estimated that the additional funding required in 2025/26 needed if baseline (i.e. pre-NHI) health expenditure increases at 3.5% per annum in real terms is R71.9 billion in 2010 prices.
The source for this is a National Treasury projection of 2012. The White Paper found that the funding shortfall increases if the baseline resources grow by a smaller margin, say if 2% each year will lead to a shortfall of R108 billion in 2025/26. It concludes that ‘over the long run, the pace of economic growth is an important indicator of overall growth rate in health expenditure”.
Not ideal if we consider the poor economic growth that has actually taken place over the last couple of years…
Can I opt-out?
Nope. It’s going to be compulsory.
Which brings us to where we are in the bill-passing process.
Under the bill sent out for discussion in June last year a three-phased approach was adopted. The first phase being from 2012 to 2017. This phase has passed.
The bill of 2019 has two phases – the first from 2017 to 2022 and the second from 2022 to 2026.
Both phases have (amongst others) the common objective of initiatives to strengthen the health system. Section 57 of the bill has objectives that must be achieved in Phase 1.
The best thing you can do at this stage is to keep an eye on things and read your Government Gazette.
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