Where we stand with universal health insurance                      

14/1/2024

Minister of Finance, Enoch Godongwana, said in the 2023 National Budget that R1.4bn has been put aside for national health insurance funding as per the NHI Bill.   As we are now in 2024, the time is ripe for a more careful study of the financial aspects of this proposed fund.  The governing party have an unhappy record of instituting policy plans to meet grandiose election promises and based on the fact that the minister hasn’t put aside any money in reality, its even more important  to study the implications of spending that kind of money.

To do this with the current atmospherics stripped away  one must just simply look at bald facts….the kind of situation that would come up if one walked into a bank and asked for a massive loan for an idea you think is brilliant. Its really about loan, not what you want to spend it on.

Down to basics

To look at NHI funding possibilities, one must free the mind of  issues such as the relationship between medical aids and SA government in terms the proposals; the tax implications for the citizen and what happens to the existing medical profession.  Also to strip away are considerations about the medical and surgical supply industries and the state’s ability to provide a service in the first place – all of this must all be stripped away and ignored.   

Not that any of this could be ignored in reality but it enables an exercise to see who is controlling events surrounding the fund itself and, as always in South Africa, to be able to follow the dots of who does what and how.

The proposal

The National Health Insurance Bill is ostensibly about a framework for the implementation of a state funded health care system, the ANC policy on the subject being for such services to be free of charges for all citizenry.

As with so much other law like the NHI Bill being speed-processed by the governing party before elections, the Bill’s passage is assured by the very nature of the ANC majority vote in Parliament.  Currently there was little time left in the parliamentary calendar  to have any lengthy argument.    Party whips kept their MPs rigidly in line on voting matters, all realizing that the promised NHI is a big election draw card for a party desperately needing votes to retain their majority.

Locked in

At this stage, the law’s appearance in the statue book is probably a given, subject only to a presidential signature and providing the Bill is not withdrawn by the Minister of Health, which is very unlikely.

As at the mid-January pause, the situation was that the Bill has been passed by the National Assembly, the ANC using its majority to carry with 205 MPs voting in favour and 125 against.  In most countries this is termed as a “forced passage.”  Being national legislation but that which could affect all citizens and not just central governance, the NHI Bill therefore needed the approval of all nine provinces with hearings accordingly in each.

The result of that exercise  unsurprisingly reflected the ANC majority in eight of the nine provinces one for the Western Cape and with the opening of Parliament on 7 February, the Bill was returned by the National Council of Provinces for final closure and any changes made.   However, whilst the Bill might be approved, its ratification as legislation will run straight into heavy traffic.

Parliament opens

In all probability, by late May 2025 there will be tense times awaiting the President’s signature to the Bill, the presidency first having had to call, as is practice, for advice on the Bill’s constitutionality.   He can ignore this if he so wishes.

The political lobby surrounding universal health care is probably now of greater consequence than any regulatory impact consideration or the inability of Treasury to finance the programme.   Clearly the ANC has decided to take on board none of what they consider doomsday talk submitted in public hearings and it appears that DOH intends posting the NHI framework into law just as if it were a blog on the internet and then get going.

Trajectory

To confirm this attitude, we go back to the meeting that we attended in 2019 when Kenneth Jacobs (ANC) chaired the first debate on the Bill after it was tabled by the then minister of health, Zweli Mkhize.  He made it quite clear to MPs in introducing his concept of a national health scheme that whatever they thought about it and whether the Bill was adopted or not, universal health care was coming to South Africa in the coming months and was to be introduced by his department (DoH), starting immediately.

Consequently, the NHI Bill has been more about political expression than a financial proposition from the very start.  It is now 2024  and the medical world awaits President Ramaphosa’s coup de grace with many asking, how did this all happen?

Honeytrap

To answer this one sadly goes, as is often the case with politics, to the money trail.   The two are usually in juxtaposition.   Dr Anthea Jeffrey of the Institute of Race Relations (IRR), whose perceptive views have always rattled the governing party, probably hit the button in 2019 when she addressed the portfolio health committee on the Bill.

She cited at the time of debate on the Bill the findings from the Davis Tax Commission.  The learned judge had concluded  that any proposals such as contained in the NHI Bill on national health insurance would not be sustainable under current economic conditions.  The Commission said that the idea offered no credible financing mechanisms and Dr Jeffrey added that is was debatable for many reasons why an arm of government would have tax legislation on its side allowing the collection of an enormous amount of public money for what appears to be a financial suicide mission.

 Mr or Mrs Big

Kenneth Jacobs, chair of the portfolio committee on health responded that NHI Fund would be under the eye of the minister of health and would be entitled to money appropriated annually from the tax base for national haelth insurance.   This would include general tax revenue reallocation of medical scheme credits, payroll tax and surcharge on personal income tax and would be the subject of a Money Bill from a minister of finance and earmarked in this for use by the fund.

At that point in the discussion, DA MP, Lindy Wilson chirped up with the comment that any clause as such in the Bill would effectively make the health minister “the king of NHI.”   Her remark was ruled out of order but it gave the clue to what is really wrong with the National Health Insurance Bill – the extent of the powers granted to the Minister of Health on money matters.

Starting the dots

When introducing the health budget to Parliament July 2019 much later, after promotion by President Ramaphosa,  then minister of health, Zweli Mkhize, started his speech introducing the NHI Bill by addressing his audience with the opening comment, “His Excellency, the President Xi Jinping of the People’s Republic of China said the growing gap between the rich and the poor is both unfair and unsustainable.   He went on to say, “Developing nations, led by China, must have the capacity to acquire strategic assets which can benefit developing nations as a whole.”

Nuts and bolts

The speech was widely watched by all South Africans at the time, but most were focused on the extraordinary idea of any national health scheme being introduced in the first place and not the ability of the state to acquire control of assets.  From this it can be better understood that the political issue has never been to worry about where the money is coming from but rather who is calling the shots on who spends what.

The latest news, as most will have read, is that despite no framework being passed by Parliament at this point, let alone any indication of funding, a budget has been found by DoH for Dr Crisp to start hiring executives for a new entity formed by DoH to commence groundwork for an NHI.  This provides more evidence that the ANC is not listening to anybody other than themselves on the issue of health care, especially the thousands who gave advice and comment to Parliament

Minister Phaala recently told his audience at the Policy Dialogue on Universal Health Coverage in SA that  “a future NHI Fund will be established as a Schedule 3A entity outside of the public service but still a government (public) agency per the provisions of the Public Finance Management Act……and will be responsible for determining the benefits that can be afforded paying both public and private providers for health care.”

Over-reach

The Minister also stated , “The Fund will administer progressively larger sums of money until more than R400 billion is under administration.”  This is an extraordinary statement for a Minister of Health, especially when no confirmation of this has emerged from a mostly silent minister of finance on the same subject in the same cabinet. The biggest problem with the NHI Bill, said the opposition party, is that the ANC is trying to legislate an ideal instead of implementing a thoroughly considered plan.

This maybe the case, of course, but by following the money trail on this and by deciphering a number of other legislative proposals before Parliament, a deeper problem emerges in the form of excessive powers claimed by ministers on funding issues,  a nasty habit of the past that can easily lead to a legislative form of state capture.

Patrick McLaughlin

editor