National Health Insurance (NHI) White Paper

The Department of Health has issued a White Paper on National Health Insurance (NHI).

The paper, Gazetted on 30th June 2017, is available for download from the Financial Planning Institute (FPI).

Dr Aaron Motsoaledi, Minister of health, ensured that the main focus of NHI is about the redirection of funds to ensure that all South Africans receive the same level of healthcare irrespective of their socio economic status. He also stated that the majority of this funding, will be obtained from the tax relief currently available to taxpayers known as medical aid tax credits.

Some of the highlights of the NHI White Paper includes:

• All South Africans will belong to the NHI.
• The NHI will be funded through payroll taxes, a surcharge on taxable income and the possibility of increasing VAT rate. The whitepaper contains five scenarios for possible funding, suggesting a combination of payroll taxes increasing between 1%-2%, and increase in the VAT rate between 1%-1.5% and surcharge on taxable income between 1.5%–4%.
• Funding for immediate healthcare programmes, such as pre-natal care programmes and school healthcare will be funded through the minimisation of the tax rebates on medical expenses.
• Targeted complete implementation date is 2025.
• Interim structures will be created to assist in preparing for the NHI fund.
• Negotiation with medical schemes will start to reduce the number of options available on medical schemes.
• There will be a consolidation of governmental medical schemes into GEMS.
• Legislation that will need to be amended includes the Medical Schemes Act, The National Health Act, Health Professions Act, The Allied Health Professions Act, the Nursing Act and Provincial health Act.
• Part of NHI’s reform has already started with PMB’s review by the Council for Medical Schemes (CMS).
• Currently healthcare is a condition of employment (in some instances) and this leads to unjust distribution of healthcare. NHI will aim to provide equal healthcare for all, and irrespective of salary or income bands, South Africans will receive the same level of healthcare.