Health Insurance South Africa: What Will Happen Under NHI?

What would National Health Insurance offer in South Africa?

The idea of National Health Insurance has long been on the table in South Africa, and the proposal has certainly seen its fair share of skeptics.  But an announcement made in December of last year made it clear that the government is still highly motivated in following through on its plans.  If NHI is indeed implemented, the money necessary for its service will come from a central fund and the health insurance South Africa currently knows will have to undergo a broad restructuring to accommodate.

Aaron Motsoaledi, the nation’s health minister, announced that, should NHI be introduced, the majority of medical services will be covered and health insurance companies will only be necessary on a ‘top-up’ basis – essentially covering the services not provided by NHI.

What Exactly is NHI

The purpose of a National Health Insurance is to both prevent the spread of diseases and promote a general national health.  In doing so, the government hopes to introduce healthcare to citizens who simply can’t afford it currently.

When the prospect of NHI was first announced in 2011, the government expected the undertaking to extend over 14 years or so.

What Will NHI Mean for Health Insurance Quotes?

The question of how the government, with its economy already taking strain, will pay for NHI is certainly a burning one.  If NHI is to succeed, it needs the devotion of some R225 billion by the year 2025.

The health minister has stated that there are several possibilities for the accumulation of this sizable sum.  Among the possibilities are an increase in VAT, an income tax addition, or a levy added to the payroll of all employed South Africans.

Essentially, the introduction of NHI will see employed South Africans forking out more money in taxes.  But, what will this do for health insurance and medical aid companies?

If employed citizens are to find themselves out of pocket, they might begin to see their current policies as luxuries.  And, with medical insurance simply being seen as a supplementary measure, the prices will be expected to fall.

With medical insurance contributing greatly to the country’s economy, surely a drop in revenue would hamper the economy.  Moreover, healthcare professionals unwilling to conform to NHI might leave the country, thus draining it of its professional resources.  Add these factors to the financial burden shouldered by the already encumbered tax payers and the concerns surrounding NHI look well-founded indeed.


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