The Role of Private Medical Schemes Once the NHI is Implemented | Legal Articles


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The Role of Private Medical Schemes Once the NHI is Implemented

The implementation of the NHI in South Africa has had many South Africans concerned and one of the biggest questions that citizens are asking is what will happen to private medical care if and when the NHI is implemented.

According to Discovery Medical Scheme in South Africa, “an important issue to consider is the future role of private healthcare and medical schemes once the NHI is implemented. As per the NHI Bill, it is stated that medical schemes will not be able to provide coverage for services that are paid for by the NHI when it is fully implemented. Our firm belief is that limiting the role of medical schemes would be counterproductive to the NHI, as there are insufficient resources to meet the healthcare needs of all South Africans.“

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A Question of Ethics

Restricting individuals from obtaining the medical scheme coverage they desire would significantly impact their expected and demanded healthcare. It may also result in erosion of sentiment, depletion of critical skills in the country, and negatively impact local and international investor sentiment and business confidence. Furthermore, forcing those who can afford it to use only the NHI system and prohibiting them from utilizing their medical scheme cover would burden the NHI further and deplete the resources intended for those who need it the most.

Limiting citizens' rights to purchase additional health insurance after contributing to the NHI would be unprecedented and inappropriate at a global level. In most other countries with some form of NHI, citizens are allowed to purchase additional private health insurance coverage, including services that overlap with those covered by the national system. Limiting the choice of medical scheme coverage is akin to restricting citizens' rights to private education for their children or private security, based on the premise that the public system already provides public schooling and public security services.

Given the potential harms that limiting the role of medical schemes could cause, it is imperative that there be strong justifications for such a policy. However, to our knowledge, no sound policy reason or justification has been presented for this approach. We believe that medical schemes will likely continue to cover the same healthcare services they currently provide in the foreseeable future for several reasons:

  • There is uncertainty as to when the NHI will be deemed "fully implemented," and it is expected to be a significant time in the future due to resource limitations.
  • There is no clear definition of services to be covered by the NHI, and it appears that the definition will be expanded incrementally.
  • The Bill allows for interpretation. While it states that medical schemes cannot cover services that are reimbursable by the NHI, it also states that patients need to follow the NHI's 'referral pathways' to obtain reimbursement. If patients choose to use their own providers, they may not be able to claim from the NHI but could still claim from private health insurance. When read together, the Bill seems to accommodate medical schemes being able to fund services that are not reimbursable by the NHI due to patients choosing not to use NHI pathways.

Discovery Medical Scheme says that it is already engaging with the Department of Health on these important issues, in conjunction with the broader business community, and will continue to do so to ensure that medical schemes and private healthcare remain integral parts of the healthcare system alongside the NHI.

Financing of the NHI System

The NHI Bill does not provide specific details regarding the likely costs of the NHI once it is fully implemented. Implementing any fundamental change aimed at improving quality and access to healthcare and contracting with private providers would require substantial additional funding. The National Treasury will potentially publish a costing document soon, and it will likely be based on an incremental approach to providing NHI benefits.

The Bill suggests that payroll taxes and a surcharge on personal income tax could be considered as potential sources of funding. However, the National Treasury would have to determine such taxes. At the presentation of the Bill, the Minister of Health indicated that no tax changes are expected over the current three-year period of the Medium-Term

Expenditure Framework (MTEF) cycle, which runs from 2022 to 2025. It is important to note that the funding mechanism and the financial implications of the NHI system are still subject to further discussion and debate.

One of the concerns raised by various stakeholders is the potential impact of the NHI on the affordability of healthcare for individuals and businesses. The NHI Bill acknowledges the need to assess the affordability and sustainability of the NHI system and commits to ongoing financial analysis and cost containment measures. However, concerns remain about the potential impact on individuals and businesses, particularly small and medium-sized enterprises (SMEs) that may struggle with increased healthcare costs.

Another aspect of financing the NHI is the potential impact on the healthcare industry, including healthcare providers, pharmaceutical companies, and medical device manufacturers. The NHI system is expected to introduce significant changes to the reimbursement and pricing structures of healthcare services, which could impact the profitability and sustainability of healthcare businesses. It is essential for the NHI system to strike a balance between affordability for individuals and businesses, and sustainability for healthcare providers and other stakeholders.

In conclusion, the NHI in South Africa is a complex and evolving issue with many implications for the healthcare system, individuals, and businesses. While the NHI aims to improve access to quality healthcare for all South Africans, there are still many questions and concerns that need to be addressed, including the role of medical schemes, the financing of the NHI system, and the potential impact on affordability and sustainability. It is important for ongoing discussions, debates, and engagement among stakeholders to shape the future of the NHI in South Africa and ensure that it achieves its intended objectives while addressing concerns and challenges along the way.

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