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Access to adequate, reliable and quality healthcare has long been an issue in this country for most. For most South Africans having access to private health care and medical aid is often regarded as a luxury. Most South Africans prefer the “wing it” option and place their health in the hands of government.

The public healthcare system does not appear to have the capability to keep up and has become crippled with staff shortages, lack of medical equipment and outdated/ill maintained hospitals.

The Minister of Health, Dr Aaron Motsoaledi, presented the National Health Bill to the public on 21 June 2018. The Bill is aimed at alleviating the challenges faced by the public healthcare system in implementing some bare minimums that the average South African will have access to.

So as the average South African you are probably wondering, what does this Bill mean for me?


The preamble of the Bill states that its aim is to:

  • provide mandatory prepayment health care services in the Republic in pursuance of section 27 of the Constitution;
  • to establish a National Health Insurance Fund and to set out its powers, functions and governance structures;
  • to preclude or limit undesirable, unethical and unlawful practices in relation to the Fund and its users; and to provide for matters connected herewith;
  • achieve the progressive realisation of the right of access to good quality personal health care services by South African citizens and permanent residents; ensure financial protection from the costs of health care and provide access to health care services by consolidating public revenue in order to actively and strategically purchase health care services based on the principles of universality and social solidarity;
  • ensure financial protection from the costs of health care and provide access to health care services by consolidating public revenue in order to actively and strategically purchase health care services based on the principles of universality and social solidarity;
  • create a single framework throughout the Republic for the public funding and public purchasing of health care services, medicines, health goods and health related products, and to eliminate as far as is reasonably possible the fragmentation of health care funding in South Africa;
  • promote sustainable, equitable, appropriate, efficient and effective public funding for the purchasing of health care services and the procurement of medicines, health goods and health related products from service providers within the context of the national health system; and
  • ensure continuity and portability of financing and services throughout the Republic.


The crux of the fund is that it will operate similarly to the Road Accident Fund. A majority of the public are not aware that they contribute to the Road Accident Fund. When members of the public purchase petrol or diesel, they automatically contribute to a statutorily prescribed levy, which is a contribution to the fund. It is this levy that claims against the fund are paid out of.

But the NHI’s fund contribution will not be linked to the fuel levy so how does government intend on financing the fund?

Section 46 of the Bill titled “Sources of Income” provides for where fund will acquire its income to maintain the fund. Section 46 (3) provides that sources of income of the Fund include (3) Sources of income of the Fund include: (a) money appropriated by Parliament; (b) interest or return on an investment made by the Fund; (c) any bequest or donation received by the Fund; (d) movable or immovable property purchased or otherwise acquired by the Fund; and (e) any other money to which the Fund may become legally entitled to.

This section has been a cause of concern for many analysts in the financial and healthcare industries. In context this section plainly means that the tax payer will have to fork out money out of their pocket to sustain an ailing healthcare system. Are we looking at a socialist approach to solve the crisis that is the healthcare system?

Investopedia defines a Socialism as a “populist economic and political system based on the public ownership of the means of production. In a purely socialist system, all legal production and distribution decisions are made by the government, and individuals rely on the state for everything from food to healthcare. The government determines output and pricing levels of these goods and services. Socialists contend that shared ownership of resources and central planning provide a more equal distribution of goods and services, and a more equitable society.”

On 12 December 2017 SARS released the 10th annual edition of the Tax Statistics which stated that “income tax Revenue from personal income tax (PIT), as a percentage of total tax revenue, increased from 29.6% in 2007/08 to 37.2% in 2016/17 with a compound annual growth rate (CAGR) of 10.8%, and a proportion of 8.4% of GDP over this period.”

Health Minister Aaron Motsoaledi stated at the release of the Bill that “Yes, under NHI, the rich will subsidise the poor. The young will subsidise the old. The healthy will subsidise the sick. The urban will subsidise the rural.”

The middle class is one of if not the biggest contributor to Personal Income Tax. With an ever shrinking middle-class, members of said class will stop and wonder whether the NHI is really beneficial to them financially as opposed to their traditional medical aids. At this point in time most are operating in the dark and said questions can only be answered if the Bill is signed by the President and the nature of the Regulations that will be passed along with it.

Some commentators are of the opinion that the middle class will feel the brunt of the NHI and will have the biggest burden of carrying the fund.

In our current society of fuel hikes, increase in food prices and the general cost of living, can individuals really afford to make contributions to the fund?


With reference to the White Paper on the Bill, the Davis Tax Committee (DTC) noted that it would cost R256bn in annual funding, based on 2010 prices.

An article on Fin24 wrote on the findings of the DTC which stated that by 2025 a funding shortfall of R72bn would be expected, even at an assumed average economic growth rate of 3.5%. Economic growth of just 2% would result in a shortfall of R108bn by 2025. The DTC suggested that even this shortfall could be understated.

Just to put the above into perspective, the economic growth rate for 2017 was 1.3% and analysts expect the growth rate for 2018 to be 1.5%, while the South African Reserve Bank at the monetary policy committee meeting in May projected a figure of 1.7%.

We are a long way away from the figures that would be required to sustain this large undertaking but the government. The Bill’s comment sessions have caused an outcry from members of the public who would be most affected but the government appear to be going ahead.


In an interview with 702 Dr Sipho Kanbane, Acting Chief Executive and Registrar for Medical Schemes at the Council for Medical Schemes said that members of the public will have to make a choice as to whether they need additional cover for the comprehensive service benefits that the NHI will be offering.

Furthermore, the National Health Insurance (NHI) will specify a cap on what patients pay for treatment, meaning it won’t be as lucrative as it currently is for many doctors operating in the private sector.

The Health Minister has reiterated that the NHI would be mandatory and that members of the public would be obligated to contribute to the NHI prior to contributing to any private medical aid premiums should any person wish to have a medical aid as additional cover. All healthcare would be free when accessed.

He further went on to state that the natural and traditional process of going to and directly consulting with a preferred specialist would not be allowed. The NHI aims to change the private sector as a whole. Members of the public would first need to see a general practitioner‚ who would then have to refer them to a specialist.

Currently the NHI Bill was released for public comment along with the Medical Schemes Amendment Bill. The government has set 2026 as a possible year for implementation.


The NHI as a concept looks good on paper but will the government be able to implement it to the benefit of all South Africans is the lingering question. HealthCare in South Africa has become expensive and inaccessible to most. The NHI’s founding values appear to be in line with certain aspects of the Constitutional but appears to be in conflict with others which may lead to future challenges in the Constitutional Court.

As the Bills are in their comment phase, it is vital that members of the public participate in the comment phase of the Bills. While some see it as a means to have better healthcare, some have feared that the NHI will become burdensome on them while others fear that it will be the beginning of an exodus for healthcare professionals in South Africa.

No matter which side of the fence you are on, the NHI is going to be a topic for debate and one can only hope that government can find a medium which is suitable for all.

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