The Democratic Alliance has managed to achieve one of its most significant wins in the Government of National Unity, as the African National Congress has walked back the most damaging aspects of the National Health Insurance Bill.
Where previously the ANC intended to initiate the work of collapsing private medical aid funds through the creation of a super NHI fund administered by the government, this is no longer part of the government’s plan for the term of the GNU.
In his State of the Nation Address, the President adjusted the immediate goals of the NHI to focus on improving electronic health records and the establishment of Ministerial Advisory Committees to unpack new technologies and benefits. This also includes infrastructure investment in several hospitals. The core aspect of the NHI has been removed, and its primary focus is going to be directed towards improving public health in the country without actively trying to destroy the private sector.
This concession by the ANC is critical, because the country was lining up towards an NHI implementation plan that would have totally crippled the fiscus and would be unsustainable. It would have also been an all-out assault on the private sector, likely chasing away investment in the industry and leading to the loss of jobs, and a major brain drain as skilled medical personnel would leave the country to pursue opportunities abroad.
Furthermore, it would have led to a crippling double-tax scheme, where South Africans who wanted private medical aid would pay their monthly premiums, only for these to be centralised in a government-controlled fund. They would then effectively have the state dictating what services were available privately and what were available publicly. In essence, your monthly private medical aid premium would only cover certain aspects of your healthcare, while not covering others which the state would monopolise and decide on. This was incredibly dangerous, as government sought to limit the role of medical schemes. This would discourage people from investing in private medical aid.
But aside from trying to cannibalise the contributions of those with private medical aids, the government would also need to try to fund the NHI fund in its totality. This would require an additional tax on South Africans. This question has not been answered at all, and remains unanswered because currently the budget for Health does not create any provision for a NHI fund. That budget is primarily used to fund salaries, operational costs and the infrastructure needs of the healthcare sector. An extra R200 billion is what is estimated and required for the NHI. That is almost 10% of the entire budget, over and above what the Department of Health already receives.
The President’s SONA commitments are a definite pivot away from what was initially conceived for the NHI and from where the ANC planned on taking it this year. With the GNU in place, he has been forced to make concessions on this matter or risk the possibility of the budget not being approved.
Instead, the commitments that are linked to the NHI are to effectively improve the current public health system as it is: health records, technologies and infrastructure, all of which can easily be supported. The immediate assault on the private medical aid industry has been stopped. Of course, this will require vigilance. At no point can the NHI fund be established if it is going to be done through collapsing the private medical sector or driving up taxes on the existing tax base.
The DA will need to ensure that it is represented on the Ministerial Advisory Committee so that any discussions on the creation of the NHI Fund are immediately managed in line with what government has in its budget and what the government and South Africans can afford.
If government wants to improvement public healthcare in the country, the solutions are right before them. Ensure that infrastructure and maintenance spending is properly spent on the projects that need the money. Stop making political appointments into the top management positions of state-owned hospitals which mismanage the funds allocated to these institutions. Act harshly and decisively against individuals who have misappropriated funds within the public health sector and make examples of them publicly. Government also needs to expand access to private cover through stronger tax credits and better competition in the private system.
The NHI as it is currently conceived is simply impossible to implement in the country without creating an incredible tax burden and crippling the private sector. Thanks to the DA in the GNU, this plan is no longer being implemented. The ANC has had to walk back its position.
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