South Africa Unveils National Health Insurance Plan
Health Minister Aaron Motsoaledi unveiled South Africa’s national health insurance (NHI) plan last Friday that seeks to extend universal health coverage to all citizens by 2025. The plan will be phased in over the next 14 years, starting with pilot schemes in 10 areas in April 2012. The idea of extending coverage to all was first discussed at the African National Congress’s (ANC) 52nd Annual Conference in December 2007 and reinforces South Africa’s Bill of Rights provision that “everyone has the right to have access to healthcare services, including reproductive healthcare.”
Under South Africa’s current two-tiered approach, health care is heavily skewed towards the private sector. Though only 20% of South Africans seek care in the private sector, the majority of resources are concentrated there and it has effectively distorted pricing across the public sector. According to the health minister, quality in the public hospitals is “totally unacceptable” and though quality is generally regarded as being high in the private sector, the majority of the population lacks access to decent services.
So what does this new plan hope to achieve? The NHI plan hopes to extend equitable services to all South Africans regardless of their employment status. Additionally, it plans to pool risks through the creation of a single fund, leverage its purchasing power to control costs, and strengthen the currently weak public health infrastructure in order to improve overall systems performance.
How will the scheme be funded? The NHI scheme will be funded through general taxes and compulsory contributions from individuals over a certain income threshold. This single pool of resources will be managed by the South African Revenue Service. The ANC has estimated that the scheme will cost an initial 128bn rand (approximately 18 billion USD), though it cautions that those are just estimates. However, the anticipated spending for the NHI currently outpaces GDP growth projections.
What is the public saying so far? Public reviews of the NHI are mixed. Many civil society organizations and labor unions are in support of the scheme, but much of the current debate surrounding the NHI Plan is about its overall cost. Business interest groups and private sector users are concerned about the compulsory costs, especially to those who do not anticipate using the public system. There is concern that the NHI has the right goal, but without serious overhaul to the system, it may be fighting a losing battle.
What happens next? Over the next three months, the NHI plan will undergo public consultation after which point the input will be incorporated and the “green paper” will be transformed into a “white paper.” The Minister has assured the public that no contributions will be required in the next year. “For the first five years we will be strengthening the health system and running pilot studies to help us finalize how the service benefits will be designed, how the population is covered and how the services will be delivered. A conditional grant will be made in the 2012 budget to fund the pilot projects. For the first five years we will be focusing on how the system is going work.” The first pilot project will begin in April 2012 and will be rolled out in 10 districts.