National Health Insurance Bill a perfect example of state overreach

The long-awaited National Health Insurance (NHI) Bill was published last week and the majority of MPs cheered. It was reminiscent of Nero, fiddling while Rome burned.

The bill is a perfect example of state overreach, and also illustrates the strange phenomenon of legislation that is written and does not get close to addressing its express purpose. Phrases such as “aims to achieve sustainable and affordable universal access to quality health-care services” appear in the bill, without any reference to how an initiative that has failed to provide clarity on its potential cost for 10 years can somehow be considered affordable and sustainable.

The official government line seems to be “we cannot afford notto implement it”, but we actually can. Not implementing NHI will not ruin the economy and will not chase thousands of taxpayers and health-care professionals out of the country. Not implementing it creates the opportunity to look at ways of addressing the current problems in the health-care sector in a pragmatic way, which might lead to positive change.

The funding of the bill is based on employer and employee tax, an income tax surcharge and cancellation of medical scheme tax credits. The average taxpayer could therefore expect to pay for this threefold. The smaller the NHI budget from the state, the more services will be denied to the 90% of the population who won’t be able to afford medical schemes under NHI.

Continued ambiguity on what medical schemes are able to offer is just as concerning. It is quite clear that schemes will be allowed to offer additional services not covered by the NHI. However, elsewhere it states that if one skips the referral chain, the NHI won’t cover those specialist services. If the NHI ceases to cover a service, it means your medical scheme may do so. Schemes would therefore be able to cover everything but basic primary care, in an instance where the referral chain is skipped. It won’t be able to cover those same specialist services if one follows the referral chain.

This leaves SA medical scheme members in almost the same situation they are in now, except everything will cost them more. The affluent will still have direct access to specialist services in an expedited manner, by skipping referral chains and self-funding the consultations, or having their medical scheme fund it. Further to this, if you choose to see a health-care provider who is not contracted or accredited with the NHI, your medical scheme should be able to pay for any services, as services by such a provider will not be covered by the NHI fund at all. This will leave us in exactly the same position we are in now, except it will cost a whole lot more.

An additional concern is that the provisions of the NHI Act will prevail if any contradictory clause appears in any other legislation, barring the Public Finance Management Act or the constitution. One can therefore expect that the Consumer Protection Act will not apply in the new NHI environment. It will also ensure that no provision in the Medical Schemes Act can bar schemes from paying for the services not covered by NHI, whether it is due to service basket design or skipping the referral chain.

The act bought itself some legislative breathing room by stating that the provinces will only start being affected once additional legislation is amended, but once that happens they will lose out on a lot of proportional health-care funding. Services will largely be rendered at national and district level, leaving provincial health departments with huge administrative salary bills and insufficient money to pay them.

Further constitutional challenges are bound to arise regarding the management of foreigners under NHI. Section 27 of the constitution states that “everyone” has the right to access health care. Not “every South African citizen”. Excluding immigrants, even if here illegally, could be challenged on these grounds.

Of course, if the NHI offers a smaller basket of services than is currently available in the public sector, or through medical schemes, this would also not amount to the progressive realisation of the right to health care. The current economic crisis makes it unlikely that an NHI service basket will be as comprehensive as the status quo, as it will simply be unaffordable to the small tax base that would need to fund this entire, monstrous initiative. Another constitutional challenge waiting in the wings…

• Serfontein is a member of the Free Market Foundation healthcare policy unit.

This article was first published on on 12 August 2019

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