National Health Insurance
Conclusions, Some History and Implications

The February and June 2009 proposals on NHI from the ANC effectively relegate existing medical schemes to a “duplicate” role which would mean that those covered by medical schemes could fall well below 1 million people from the currently 8 million people covered. Debates around this issue tend to become politically and ideologically heated but there are strong economic arguments for looking at the public-private mix in technical terms and playing to the strengths of each sector.

It is often alluded to that National Health Insurance was first proposed in the ANC Health Plan of 1994 and that the resolutions made at Polokwane, which lead to the current proposals, are merely a continuation of that tradition. A careful re-reading of the ANC Health Plan of 1994 shows a different system being envisaged: the majority of that document is focussed on the creation of a National Health Service, not a National Health Insurance system. “A single comprehensive, equitable and integrated National Health System (NHS) must be created.” NHI (as opposed to NHS) merits less than 1 page of that 77 page document.

NHI is mentioned as a possible way to deal with the problems in medical schemes. A committee of enquiry was to be formed to consider possible structures for an NHI under the following principles:

• “The current medical schemes could form the basis of the NHI, provided they met with specified statutory conditions governing the NHI system.
• Membership would be compulsory for all formal sector employees and their dependants.
• Schemes which form part of the NHI should be prohibited from excluding any member (e.g. on the basis of high risk).
• The basic package of care to be covered by the NHI should be statutorily defined.
• Contributions to cover the basic package would be income related, probably determined centrally, and should be jointly paid by employers and employees.
• This contribution revenue (covering the basic package) should be pooled in a central equalisation fund, out of which every scheme would be paid in terms of its overall risk profile i.e. a risk adjusted capitation fee.
• Existing health insurance companies and medical schemes would be free to offer "top-up" cover for services not covered in the NHI essential package.
• The long term goal would be for all citizens, including the unemployed, to be covered under the NHI system.”

Thus what was envisaged initially seems to be a multi-tier system: a public National Health Service, alongside of which is a mandatory contributory environment for formal sector workers. This suggests that the ANC Health Plan envisaged a “substitutive” role for medical schemes under NHI. This early thinking needs to be revisited in the NHI debate in 2010.

Produced for IMSA by
Professor Heather McLeod
7 December 2009

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