Key Features of the Current NHI Proposal


In South Africa, the debate surrounding the introduction of a national health insurance scheme (NHI) has returned to centre stage after recent announcements that such a scheme will soon become a reality. The ANC stated in its 2009 Election Manifesto that the NHI would be one of its key priorities. This was confirmed by President Jacob Zuma in his 2009 State of the Nation address. The idea of a national health insurance system is nothing new and the aim of providing universal coverage is one that characterises the health reforms of many developed and developing countries.

The most important issue from an economic perspective is the cost of such a scheme, especially under an assumption of universal access. Some commentators have already warned that the proposed NHI will be massively expensive or even completely fiscally unaffordable. Clearly, there is a need for proper economic analysis of the costs and benefits of NHI in South Africa.

This note is the first of a series of ‘NHI Notes’ that will examine these issues in more detail. The series of research notes will deal with some of the important questions that need to be answered around the viability of a NHI scheme and is aimed at contributing to the debate around costs and optimal design. One of the principal challenges is the lack of transparency in the current process. Originally, the only available documents that provided more detail on the proposed scheme were a (leaked) 200 page ANC document , a (leaked) 68 page ANC policy proposal on National Health Insurance and a 4 page elucidation in ANC Today. The first concrete steps towards the establishment of a South African NHI were recently taken with the establishment of a National Health Insurance Advisory Committee. This committee has the mandate to ‘advise the Minister on the development of policy and legislation relating to the introduction of a National Health Insurance System .’ Two expected outcomes of the National Health Insurance Advisory Committee are the finalisation of an implementation plan by June 2010 and the eventual implementation of a full NHI system over a five year period.

The aim of this first NHI Note is to understand in more detail what is currently known about the proposed NHI. The following promise appears in the ANC Today summary: ‘Contribution will be less than what members and their employers currently pay to medical schemes. Certain categories of workers, due to their low- income status, will be exempted from the contribution. All these funds would be placed in a single pool that would be available to fund all health care in the public and private health sector under conditions that would apply to all health care service providers’. Such a statement means little if the terminology remains undefined and no detail is available.

In this NHI Note, some of the key features of the proposed NHI plan will be unpacked and commented on. Experiences from countries that have implemented similar health insurance systems will be touched upon to provide an idea of the practical implications involved in the implementation of each of the features mentioned. This will provide a platform to understand the implications of the current proposal and the resources required to achieve these goals.


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