Insightful BlogsAugust 23, 2019

The new Government NHI plan – like it or not, there are implications

The new Government NHI plan – if you like it or not, there are implications

It is fair to say that South Africa’s National Health Insurance (NHI) Bill 2019, introduced to the National Assembly on 8 August, is a contentious issue and remains a talking point for both employees and employers.

As CRS Technologies, our first point of departure (and advice to all business leaders and employees) is to equip ourselves with as much knowledge as possible. As the saying goes, ‘forewarned is forearmed’, and it is always best to have a firm grasp of would-be legislation in order to best prepare, avoid problems and secure any advantage.

The first question to ask is: ‘Why has the government introduced the Bill?’ Well, it aims to achieve several objectives,  but the main ones to focus on for now are universal access to quality healthcare services as per Section 27 of the Constitution, and the establishment of a National Health Insurance Fund that will be managed to purchase healthcare services on behalf of users.

The Bill has drawn criticism from some circles

That is a synopsis of a broader set of objectives, but the government is positioning the Bill as a means to assist medical scheme members with their high out-of-pocket costs.

The official position is that the government acknowledges that state medical staff and hospitals cannot cope with treating the majority of South Africans who do not have a medical aid.

It is also fair to suggest that the Bill has drawn criticism from some circles, specifically from those who are concerned over the affordability of the NHI and the capacity to manage this fund.

There are, of course, implications for both the employer and employee.

Every South African citizen will become a member of the NHI Fund and citizens who earn an income will contribute towards the NHI Fund. The contribution percentage that could be levied on an employee and its employer has not yet been determined.

Levy an extra tax on taxpayers’ personal income

Government will levy an extra tax on taxpayers’ personal income and use the money it will save by not giving taxpayers tax credits for being a member of a medical scheme.

Government will use South African citizens’ tax money, as well as some of its healthcare budget, to buy services from public and private doctors, specialists and hospitals that are accredited with the state.

The fund will cover a range of medical services, treatments and procedures for free, except if it is not a medical necessity, and on an annual basis, government will determine what prices will be paid for by specific services.

It is very important to note that citizens might be expected to register with a GP who is contracted with the state. Each contracted GP might have a set number of patients who they will service for the NHI Fund.

Medical schemes may disappear and foreigners won’t be covered

There will be strict rules about seeing specialists: people won’t be able to go directly to a specialist, but will have to obtain a referral first.

The state will buy medicines for everyone, medical schemes may disappear and foreigners won’t be covered. Foreigners visiting South Africa must have travel insurance to receive health care services through the NHI Fund.

The fund will be managed by a CEO, who will be appointed by the Minister of Health.

All these aspects could have serious and long-term implications for the general welfare of South African households and, by default, the country’s workforce. No tax credits for medical aid payments will impact on the purse-strings, and one can only but express concern over rising unemployment (at 29%) and a pressurised economy.

At the very least it is best to understand this possible legislation and how it could affect your operation and your employees.

As always, we invite you to contact our legislation team at if you require any additional information.

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