National Health Insurance

What is the National Health Insurance?

The national health insurance scheme or NHI will be a compulsory scheme providing medical cover for all South Africans. It will allow all South Africans to access quality and comprehensive health services, which will be free at the point of service.

The scheme will be funded from two sources of revenue, namely general tax revenue and an earmarked mandatory contribution by all employed individuals. These funds will go into a national health insurance fund which will be publicly administered and managed. This pool will fund all healthcare in the public and private health sector, under conditions that will apply to all healthcare service providers.

Why do we need National Health Insurance?

The major challenges that have been identified in the health sector are mainly that, despite the great strides that have been made in the last 15 years to build a unitary national health system, and to increase access to healthcare, the public health sector has failed to significantly improve the quality of care. In many areas access has increased but quality has deteriorated. The country is faced with a heavier burden of disease, shortage of human resources, poor management of health institutions, poor financial management and inadequate funding, and deteriorating infrastructure.

The private health sector has to deal with cost escalations mainly from over-servicing of patients and non-health related expenditures such as administration fees, managed care fees and brokerage fees. The medical aid industry is also in a state of flux and often operates in a crisis mode. Membership to medical schemes has become increasingly unaffordable. Medical schemes membership has declined considerably as a percentage of the population, from 17% in 1992 to less than 15% in 2005 (Council for Medical Schemes, 2006).

The implementation of the National Health Insurance, is one of the ten government priorities for health.

The NHI will enable the creation of an efficient, equitable and sustainable health system in South Africa. It will be based on the principles of the right to health, social solidarity and universal coverage.

One of the main concerns that have been raised by various commentators on the NHI is the future role of the private sector. The policy of the government is that the private sector is an important role-player in the delivery of healthcare.

Government is currently improving public healthcare, which will make it easier to implement the NHI. The implementation of the NHI should result in the strengthening of the National Health System. It will also need and result in the improvement of quality of care.

Progress with the implementation of the NHI

The Green Paper on NHI [PDF] was released in August 2011 for comment. The cornerstone of the proposed NHI system is universal coverage. NHI is a financing system that will ensure the provision of essential healthcare to all citizens of South Africa (and legal long-term residents), regardless of their employment status and ability to make a direct monetary contribution to the NHI Fund.

This is seen as a 14-year project, with the first five years being a process of building and preparation.

An update on the progress was released on 26 November 2015.

What will the NHI offer?

The NHI will offer all South Africans and legal residents access to a defined package of comprehensive health services. The State is committed to offering as wide a range of services as possible.

Although the NHI service package will not include everything, it will offer care at all levels, from primary healthcare (PHC) to specialised secondary care, and highly specialised tertiary and quaternary levels of care.

Examples of what the NHI package will exclude are:

  • cosmetic surgery that is not necessary or medically indicated but done as a matter of choice
  • expensive dental procedures performed for aesthetic purposes and eye-care devices such as fashionable spectacle frames
  • medicines not included in the National Essential Drug List, except in circumstances where the complementary list has been approved by the Minister of Health
  • diagnostic procedures outside the approved guidelines and protocols as advised by expert groups.

The benefits provided will cover preventive, promotive, curative and rehabilitative health services. The emphasis will be on preventing disease and promoting health.