UHC, NHI AND SDG

The World Health Organization (WHO) defines UHC as “Ensuring that all people have
access to needed promotive, preventive, curative and rehabilitative health services, of
sufficient quality to be effective, while also ensuring that people do not suffer financial
hardship when paying for these services”.
The WHO principles of affordable access to quality healthcare is an absolute imperative
in the South African context.
goals.
SA is moving towards rolling out universal health coverage (UHC) through the
implementation of a National Health Insurance (NHI) scheme.
The UHC’s main objectives are to give all people and communities access to quality
healthcare services that include promotive, preventive, curative and palliative care
without exposing users to financial hardship.
These have been identified by the United Nations as one of its Sustainable
Development Goals that member states should try to achieve by 2030.

WHAT IS THE NHI?

 The government began piloting NHI in 2011, but has yet to drive through any
significant reforms to breathe the policy into life

 The National Health Insurance Policy, released on 28 June 2017, sets out the
framework for the second and third phases of the implementation of national
health insurance, stretching between 2017 and 2022, and between 2023 and
2026 respectively.

 The National Health Insurance (NHI) Bill is before a cabinet subcommittee, a vital
step before it can be signed off by the full Cabinet and tabled in Parliament.
 A key provision of the bill will be the establishment of an NHI fund to pay for
health services.
 NHI is a set of health financing reforms to provide everyone with healthcare
services free at the point of delivery. It is enshrined in the social solidarity
principle that everyone should contribute according to their means and will
 receive benefits according to their needs, in effect ensuring the rich and healthy
subsidise the poor and sick.
 The National Health Insurance (NHI) is designed to create a single compulsory
medical scheme for all.
 All citizens and permanent residents will be covered by the NHI, while a special
fund will be set up for refugees.
 Documented asylum seekers will be able to access emergency care.
 The NHI will be introduced in three phases.

THE NHI VISION

 To lay the foundation for universal health coverage for all South Africans,
regardless of their ability to pay for medical services.

 It is to be a single-payer and single-purchaser fund, in which funds will be pooled

and personal health services purchased on behalf of the entire population.

NUMBERS & INEQUALITIES

 Currently the total expenditure on health care in South Africa (SA) is 8.5% of the
Gross domestic product.

 Motsoaledi has constantly pointed out the gross inequality of access to

healthcare that exists in South Africa, with half of the doctors in the country
serving the roughly 16% of the population who are medical scheme members, or
who can afford to pay for medical services themselves.

 Only 16% South Africans have access to private health care and the remaining
84% use the public health care.

 As far as specialist healthcare goes, 80% of specialists are to be found in the

private sector and only 20% in the public sector.
  Of the 8.5% total health expenditure GPD, 4.4% serve only 16% of the total
South African population, while the remaining 4.1% is shared by 84% of the
population

 If a loaf of bread was the total healthcare expenditure to be shared 100 South
Africans, 16 rich South Africans will take half of that bread and the remaining half
be shared by 84 South Africans.There are about 8.8 million people on medical
aids in total.

 TimesLIVE calculated that there are at least 2.2 million beneficiaries on

government medical aid schemes‚ including 1.7 million on the Government
Employee Medical Scheme (Gems)‚ around 500‚000 on Polmed and just over
5‚000 on smaller schemes like the SABC and parliamentary schemes.

FINANCING OF NHI

 This year Treasury allocated an additional R4.2-billion to the National Health

Insurance (NHI), sticking to its guns on funding it through cutting tax credits.
 Gigaba said accelerating the roll-out of NHI was part of the government's plan
not only to increase social protection but to raise the life expectancy of South
Africans to at least 70 years by 2030.
 Overall, the government would be spending R205-billion on health this coming financial
year. This amount is estimated to grow to R240-billion by the 2020/21 financial year, the
2018 budget review document revealed.
 The cost projections in the recently released White Paper have however not been
updated and are the same as set out in the 2015 White Paper, and the initial 2012
Green Paper. With the 2010 cost estimation inflated with the consumer price index, in
2017 terms the NHI will not cost the taxpayer R255.8bn, but R368.8bn, by 2025.
Even this, however, is a conservative estimate in light of overly-generous future
growth estimates provided by government. Furthermore, in 2017 terms, NHI will cost
South Africa R156bn every year from 2025 onward – assuming we achieve 2%
growth – which is roughly equal to four 2010 Soccer World Cup tournaments or 1.4
 million government houses per year. The NHI would double South Africa’s health
budget.

TAX CREDITS TO FUND NHI

 The National Health Insurance proposes that current medical scheme members lose
their tax credits to help pay for the first set of NHI benefits. It also suggests doing away
with medical scheme subsidies for government workers and state-owned entities’
employees.
 Tax credits will be increased below inflation over the next three years to fund
expenditure for the NHI.
 National Treasury has showed that 56% of the total credits claimed in 2014-2015
accrued to around 1.9 million taxpayers with a taxable income below R300,000.
 Until we have a viable NHI in place, the medical aid credit will play an important
role in making decent healthcare more affordable to millions of low-income
earners.

QUESTIONS RAISED:

Where would this pooling of funds leave the average medical scheme member,
with regards to getting medical cover?

Will medical scheme members have to pay twice?

Increasingly, medical scheme members are starting to wonder whether they will have to
pay twice – once for the NHI and once for their private medical schemes.

While nobody can defend inequalities of access, there have been major issues of
concern among economists and healthcare professionals with regards to the following

• The quality of service currently provided by the state hospitals;

• The high, profit-driven costs of private hospitals and private doctors,

• High, ever-increasing costs of medical scheme membership;

• The funding of the NHI in an already embattled economy; and

• The future of medical schemes and the private health system under the NHI.

Many of these issues have been addressed in the White Paper, such as including
suggestions of a payroll tax and a 2% surcharge on taxable income to fund the NHI.

But many questions about the future of medical schemes remain unanswered, and
details of the exact role and format of medical schemes under the NHI are yet to be
negotiated and decided. The information we currently have is, at best, an indication of
future possibilities for the schemes.

While many scheme members express reservations about using state services,
increasing member contributions and high co-payments for private medical care are
concerns shared by the majority of medical scheme members and Motsoaledi.

WHAT WE KNOW ACCORDING TO WHITE PAPER

The National Health Insurance (NHI) white paper was gazetted today in June 2017 after
being approved by Cabinet.

• All South African citizens will have to belong to the NHI – there will no choice to opt
out.
• The aim is to provide the same healthcare for everyone, irrespective of their ability to
pay for it.

• Funding for the NHI will be through payroll taxes (1% to 2 %), a surcharge on taxable
income (1.5% to 4%) and a possible increase in VAT (1% to 1.5%), although the VAT
hike seems unlikely.

• The targeted date for implementation of the NHI is 2025.

• Negotiations will be started to reduce the number of options available on medical
schemes.

• Governmental medical schemes will all be consolidated into the Government

Employees’ Medical Scheme (GEMS).

• Tax rebates on medical expenses and medical scheme contributions for individuals
will be minimised and the funds redirected for immediate healthcare programmes, such
as prenatal care programmes and school healthcare.

Here’s more detail on about what the White Paper says about the future of
medical schemes and private healthcare services, and what these extracts could
possibly mean for medical schemes, medical scheme members, and private
healthcare providers.

There will be mandatory prepayments

This means that everyone will have to contribute to the NHI fund, whether you choose
to use the NHI healthcare services or not. If you choose to remain on your medical
scheme, the NHI contribution will be over and above what you contribute to the medical
scheme. You cannot opt out of this.

There needs to be reconfiguration and transformation of institutions for the pooling of

funds
Exactly what this would mean in practice is uncertain, but the minister of health has on
several occasions included private medical scheme contributions (not just state medical
schemes such as GEMS) in the total sum of money spent on healthcare in South Africa.

This has caused confusion, as the government does not have control over these funds
which individuals pay to medical schemes. The idea is ultimately to achieve income and
risk cross-subsidation to fund healthcare costs, but just how this will be achieved
remains uncertain.
Trustees run medical schemes and legally the funds, including the reserves, belong to
the members, and not to government.

Optimising the utilisation of available resources, both human and financial

This presumably means spreading healthcare resources - such as funding for
equipment and medicines and the availability of doctors - more evenly, so that more
people have access to them.

While the sentiment is very noble, it has to be remembered that private doctors and
private hospitals are just that: private.

While they too are subject to the laws of the country, there is nothing that stops them
from shutting up shop and taking their skills or services elsewhere if working conditions
or regulations become unfavourable.

But many medical scheme members buckling under co-payments to private doctors and
hospitals will fully understand where Motsoaledi is coming from on this issue.

The putting into place of mechanisms to streamline healthcare service

No details are available on this, but it would presumably refer to the capping of costs
charged by private healthcare providers, or to a new legal requirement obliging doctors
to work in certain areas, or to give a portion of their time to public healthcare services.

Medical scheme contribution subsidies and tax credits will be consolidated into the NHI
funding arrangemen
Many state employees currently receive an employer subsidy for their medical scheme
contribution. This will come to an end, as will tax credits for all medical scheme
members (currently R286 per month per member, and for the first dependant).

Most private companies have moved to a total-cost-to-company pay structure, and not
many employees receive medical scheme subsidies, since these became a taxable
benefit of every employee.
Medical schemes will offer complementary cover to fill gaps in the service coverage
offered by the NHI
This would certainly imply a rewriting of the Medical Schemes Act of 1998, as currently,
state services and medical schemes are bound to provide the same Prescribed
Minimum Benefits.

In other words, if the state will not provide a particular service, the medical scheme
cannot be forced to do so. An example of this would be elective cosmetic surgery.