Lawmakers Pass Contentious South African Health Insurance Law

(Bloomberg) -- South Africa's National Assembly has approved new legislation that would pave the way for universal health insurance, a plan critics say would be financially unsustainable and impossible to implement effectively.

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The National Health Insurance Act aims to ensure that all South Africans have access to quality health services and provides for the creation of a fund to finance almost all medical treatment provided by approved providers at rates set by the state. Private insurers can only pay for goods and services not covered by the fund.

The 16 percent of the population with private health insurance is responsible for 51 percent of government spending, while the rest is spent on the other 84 percent of the population that relies solely on the public health care system, Health Secretary Joe Pahla told lawmakers. discussion on Tuesday's bill. .

"This has created a situation where the public health system is under enormous pressure, while the private health sector overtaxes clients, leading to increased costs," he said.

According to the bill, money for the new fund would come from general tax collections, payroll taxes, an income tax surcharge and reallocation of funds for tax breaks currently offered to private insurers. The head of the Department of Health, Nicholas Crisp, said around 8.5% of GDP was already spent on health, and after removing duplication and inefficiencies from the system, the funding gap was not as large as NHR critics claimed. fear

The bill will now go to the National Council of States and, if passed, to President Cyril Ramaphosa for his signature. This is likely to be challenged in court as it undermines the constitutional rights of both patients and healthcare professionals.

"While achieving universal health coverage in South Africa would be laudable, it must be done in a sustainable manner and ensure the best use of scarce government resources," said Busi Mavuso, CEO of Business Leadership South. Africa He warned that all South Africans would be worse off for using natural gas under the bill, which would fail to provide adequate services to the state and would effectively undermine the private system.

"The single-buyer model compromises accountability by taking the purchasing decision away from the patient," Mavuso said in a June 5 email. "Furthermore, a huge bureaucracy must control the quality of care to overcome the problem that patients cannot choose their providers. Maintenance costs will cancel out the supposed benefits of economies of scale, while quality remains the same. And the reality is that health systems often do not control the quality of medical care.

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