On 15 May 2024, President Cyril Ramaphosa promulgated the National Health Insurance (NHI) Act. The Act aims to provide universal health coverage to all South Africans by creating a unified system, bridging existing disparities between private and public healthcare. This reform will have a considerable impact on funding, access, and administration of South African healthcare. By examining the goals of the NHI, its effect on private healthcare, and by comparing it with the current legislative framework, ordinary South Africans may begin to prepare for the practical implications of its implementation.


The Current Landscape: Two-Tier Healthcare System

Currently, South Africa’s healthcare system operates under a two-tier system comprising a public sector funded by the government and a private sector funded through medical aid schemes. Approximately only 15.8% of the population can afford private healthcare, while the vast majority of citizens rely on the public sector, which is often characterised as under-resourced and overburdened.

Participation is voluntary and funded through medical aid contributions and out-of-pocket payments, with premiums determined by the market. Although private healthcare serves a minority of the population, it consumes a disproportionate share of the country’s healthcare resources.

Conversely, public healthcare is characterised by limited resources and extensive demand, resulting in a bleak prospect of accessing dignified medical care. It is funded through general taxation and allocations from the national budget. While theoretically accessible to all, the public sector often fails to deliver timely and adequate services.

Despite the constrained public infrastructure supporting them, South Africa’s medical doctors are lauded for their expertise with many working within the confines of shoestring budgets and staff shortages. These issues have led the government to attempt to address the disparity between private and public healthcare through the introduction of the NHI.


The NHI: Healthcare Reform

The NHI represents a significant shift in South Africa’s healthcare system. It aims to provide comprehensive coverage to all South Africans irrespective of their financial status, inclusive of primary healthcare, hospital services, and specialised care.

A single NHI Fund will be established, funded by general taxes, mandatory contributions from individuals earning above a certain threshold, and employer contributions. This model ensures that wealthier segments of society subsidise healthcare for those not able to afford, promoting equity and social solidarity. On paper, this means access to quality medical care based on need rather than one’s ability to pay.


Implications for Private Healthcare and Medical Schemes

Private medical schemes will be restricted to offering complementary cover for services not already catered to by the NHI. This contrasts sharply with the current situation, where private schemes provide primary healthcare cover for their members. As medical schemes shift to this supporting role there is likely to be a reduction in membership. This could lead to higher premiums for those remaining in private schemes, raising questions about the sustainability of private health insurers and the future of benefits currently enjoyed by their members.

Private healthcare providers will be integrated into the NHI system and reimbursed by it. Currently, these providers can set their own fees, but future reimbursements will be subject to government regulations and fee structures.


Financial Implications for South African Citizens

The NHI will introduce mandatory contributions, adding a financial burden for those already using private medical schemes. This will impact take-home wages, with higher-income earners contributing more through increased tax rates. The South African Revenue Service (SARS) estimates that personal income taxes could increase by up to 2%. This increase may be manageable for higher-income earners but could pose significant financial strain on middle-class families already faced with high living costs.

The financial viability of the NHI is a major concern. Funding requirements are estimated at 500 billion rand annually, imposing a substantial burden on the economy and taxpayers. There are also concerns about the government’s capacity to efficiently manage such a vast fund, given historical issues with mismanagement in public institutions. Doubts persist about whether the NHI can effectively address existing deficiencies in the public healthcare sector, such as poor infrastructure and staff shortages.

Legal challenges have emerged, with several stakeholders, including political parties and business groups, raising constitutional concerns and threatening legal action to block the bill’s implementation. Additionally, the South African Medical Association (SAMA) and the Hospital Association of South Africa (HASA) have expressed concerns about the potential exodus of healthcare professionals.



The success of the NHI will depend heavily on effective implementation, efficient management of funds, and the ability to sustain public confidence amidst financial and operational challenges. The transition from a dual system to a unified one is fraught with complexities. By examining the current legislative framework and understanding the practical implications of the NHI, stakeholders can better prepare for the changes ahead, ensuring that the potential of the NHI to provide equitable healthcare access of the NHI translates into tangible outcomes for all South Africans.


For more information about the Act …. [INSERT LINK]

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