National Health Insurance holds the promise for the transformation

National Health Insurance holds the promise for the transformation of the medical aid sector

As the government lobbies to implement the National Health Insurance (NHI), the South African healthcare sector stands to be transformed. The NHI is a fund that aims to give all South Africans access to quality and affordable healthcare – but it also brings the opportunity for transformation within South Africa’s medical aid sector.

The fund will cover the healthcare costs of South Africans, regardless of their socio-economic status, which means there will be no fees charged at healthcare facilities.

While this may seem similar to the work of medical aid schemes, the NHI has two key differences. Firstly, it will cover every South African, regardless of employment or income level and does not need the individual to opt-in. Secondly, the

type of healthcare provided to each patient will be of the same standard and will be determined by their health condition and not their choice of healthcare plan. This means there will be no limits on benefits.

The NHI is expected to keep the cost of healthcare at a reasonable level while compensating healthcare providers fairly. This will see public and private healthcare providers compensated on the same basis and expected to provide the same standard of care.

The NHI will be funded through taxes, which will see every South African earning above a certain amount required to contribute towards the fund. This will be administered in the same way as contributions to the Unemployment Insurance Fund. Individuals will be free to continue their medical scheme membership, but they will not be able to opt out of making contributions to the NHI Fund.

A NEW FUTURE FOR MEDICAL AIDS

The NHI brings with it many benefits but will require the current medical aid industry to make changes and upgrade its offerings.

Because the Government will no longer provide tax subsidies for medical scheme contributions and will accommodate medical aid members within the NHI, it is likely that fewer people will continue their current medical aid memberships.

However, it is likely that many people will need a form of additional health insurance to cover healthcare procedures considered cosmetic or non-essential. While the NHI Bill is still in the process of being finalised, it is most likely that medical aid schemes operate in a new role.

Instead of offering a comprehensive benefit structure that covers all procedures and treatments, medical aids will most likely offer insurance that covers services that are not reimbursed by the NHI, in complementary or top-up products. The services not covered by the NHI are yet to be finalised, but the NHI has already excluded services such as expensive dental procedures performed for aesthetic purposes and eye-care devices such as fashionable spectacle frames, as well as medicines not included in the national essential drug list. Certain diagnostic procedures may also be excluded.

There is also room in the Bill to allow for medical aids to continue to operate, which could allow South Africans to choose to claim from a private medical aid instead of the NHI.

In other countries with national health insurance, individuals are allowed to purchase additional medical insurance cover. While it poses a change to the medical aid sector, the NHI also brings to opportunity for medical aid funds to innovate in their products and develop of new health insurance products. •

THREE BENEFITS OF THE NATIONAL HEALTH INSURANCE FOR PRIVATE HEALTHCARE PATIENTS

The NHI aims to make quality healthcare affordable to every South African and reduce the financial burdens that come with accessing health services.

Some of the benefits of the NHI are:

• Each person on medical aid spends more than five times the amount spent on each person who relies entirely on public health facilities. This two-tiered system has failed to see quality healthcare delivered for all, as the Government pays for both the health facilities that assist the poor and provides tax subsidies for medical scheme contributions by those who can afford them. Instead, it has led to an increased health care gap between the rich and poor.

• Even those that can afford medical aid often find themselves shouldering the financial burdens of healthcare. Private medical costs have increased in recent years and many find a large portion of their salaries are being spent on medical aid. In addition, many medical aid members still find themselves making out-of-pocket payments, such as co-payments or gap payments when their medical aid benefits are depleted.

• Because the NHI will pay both public and private healthcare professionals and facilities at the same rate, it will reduce the cost of private healthcare. The NHI aims to fairly compensate healthcare professionals but will use more cost-effective methods of payment than currently used by medical aid schemes. In addition, under the NHI the Government will source all medication and the bulk purchasing will also reduce the cost of medication.