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SONA Speech: NHI Bill on its way to Parliament

08 February 2019African Unity Life

Life insurance provider 'African Unity Life' has commented on comments made in President Cyril Ramaphosa's State of the Nation Address about the pending submission of the NHI Bill to Parliament.


"We welcome the President’s confirmation (in this address on Thursday night) that the much talked about National Health Insurance (NHI) Bill is almost ready to be submitted to Parliament. Considering that we are heading to the polls on 8 May, it is clear that there won’t be time for this current Parliament to deal with it and hence work will probably only start after June or July, once the new Parliament has been convened," says Johan Ferreira, Chief Legal and Compliance Officer at African Unity Life.


"In relation to giving the consumer a better deal, we understand that a primary aim of the bill will be to regulate medical schemes in such a way that co-payments for healthcare will be eliminated and that a uniform tariff structure for healthcare providers be implemented. This sounds positive but might also have further unintended repercussions. As an example, co-payments charged for certain procedures are in place to protect the funds available for claims that are truly a medical necessity – it is a risk management tool. In such circumstances, co-payments should encourage members to consider alternatives to these elective procedures. If co-payments on elective procedures are scrapped, this could open up risk for the majority of members in favour of the few that needs it," he says.


With regards to the smaller medical aid schemes and how the legislation will affect them, there have been suggestions that the smaller schemes should be disbanded in order to incorporate these members in the bigger schemes.


This is however something that should be addressed in legislation as currently the Medical Schemes Act allows a scheme to be registered if they have 6,000 or more members. Amalgamation of these smaller schemes is also a possibility.


"The NHI proposals of course envisage a single system, with an option for the wealthy to buy additional cover. Taking into account the payroll tax that is likely to be introduced to fund NHI will make people seriously consider whether the additional cost of medical scheme membership is worth it. This can have a devastating influence on smaller schemes as they will play a role in filling the gap, so to speak," explains Ferreira.


"Another aspect of NHI, more specifically, envisages a public-private partnership (PPP) and I reckon the private sector would have to come to the party to help with the development and successful implementation of NHI. With the Medical Schemes Amendment Bill in the final stages and NHI on the go we need the best skills from the private sector to contribute to the public sector to contribute to a better life for all South Africans.


"We don’t have to reinvent the wheel with NHI – we have to make use of the lessons learnt in the private sector. This can set the stage for a PPP when NHI is implemented that can actually work. The private sector has the knowledge that can shape NHI to the benefit of the public sector as well," he says.

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