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22/06/2018 07:51 SAST | Updated 22/06/2018 07:52 SAST

'The Rich Will Subsidise The Poor' – Motsoaledi Outlines Universal Healthcare Plan

"Currently, it's the opposite. At present, the poor subsidise the rich, and we will attempt to show that."

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The first set of enabling legislation paving the way for universal healthcare in South Africa has been gazetted by Cabinet, Health Minister Aaron Motsoaledi announced on Thursday.

Motsoaledi presented two bills to the media on Thursday that would lead to massive changes in the way public health and medical aid coverage are handled in the country: the National Health Insurance (NHI) Bill and the Medical Aid Schemes Amendment Bill.

The minister said that the essence of the NHI is that the "rich will subsidise the poor, the young will subsidise the old, and the healthy must subsidise the sick".

"Currently, it's the opposite. At present, the poor subsidise the rich, and we will attempt to show that."

Only 10% of South Africans could afford what was being charged in private healthcare, he said.

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The NHI Bill seeks to establish a fund – the National Health Insurance Fund – to act as a public entity governed by the Public Finance Management Act.

The fund will be a single public purchaser and financier of health services in the country, to ensure "equitable and fair distribution" and will be a mandatory pre-payment health services system.

It will purchase health care services, medicines, health goods and health-related products from certified, accredited and contracted service providers on behalf of the public.

It will "pool funds to provide access to quality health services for all South Africans based on their health needs and irrespective of their socio-economic status", the minister explained.

The aim is for everyone to have the same access to the same standard of healthcare regardless of income, what people can afford or how frequently they need the services.

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Motsoaledi said there couldn't be one set of rules for the rich and another for the poor as both groups "have the same health needs".

He acknowledged that the move would require a massive reorganisation of the current health system, both public and private.

The National Development Plan described the exorbitant costs of private healthcare and the poor quality of public healthcare as the "terrible twins" of the health system.

Many have argued the country needs an overhaul of its health service first before changing the way it is funded, he said.

Fixing public healthcare, however, won't be a single event, but a continuous, ongoing process, and shouldn't be a "big stick" with which to beat back the move to national healthcare, he said.

"We are very much alive to the problems of poor quality in the public health system," he said.

South Africa currently spends a total of 8.7% of its GDP on both public and private health, he said.

The private sector spends 4.5% of GDP on health but only provides care to 16% of the population.

The public sector spends 4.2% of GDP on health but provides care to other 84% of the population.

"We are in the same 'WhatsApp group' as Europe when it comes to spending, but why can't it be comparable? It looks like chalk and cheese. The reason is the way the money is divided."

On top of that, South Africa is an outlier when it comes to voluntary spending on private health insurance.

South Africa spends 42.2% of total health spending on private healthcare, the highest proportion in the world. The US meanwhile spends 32%. The world average is 4.1%.

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The NHI Bill will seek to make amendments to 12 other existing acts of Parliament in order to pave the way for an effective national fund.

For the purposes of the briefing, Motsoaledi confined himself to two acts: the National Health Act of 2003 and the Mental Health Act of 2002.

The amendment to the National Health Act will essentially give the minister's office more direct capability in intervening in ailing provincial health departments, as it did in the North West earlier this year.

The same would apply for mental health services.

School health has been identified as the "heartbeat" of the new system under the NHI, with 12 million children in school currently.

After screening 3.5 million school children, the department found that eyesight, hearing, oral health and speech were physical barriers to learning.

The NHI would intervene in the matter, allowing for free glasses, hearing aids, oral hygienists and speech therapists. Pilot projects will be launched this year.

"We cannot wait for kids to arrive in clinics already sick. We need to know what is going on with them because they are the future."

Motsoaledi also announced the new Medical Aid Schemes Amendment Bill that will change how private medical aids operate in South Africa.

The minister said changes were necessary to pave the way for the NHI.

"The first amendment is to abolish what has become known as co-payments."

Citizens have paid in the last financial year a sum of R29bn in co-payments from "their own pockets".

"The patient should not be burdened with the need to pay anything," Motsoaledi said.

"Of course there are people who say this amendment is callous and aimed at destroying the medical aid system. I assure you this has been well thought through."

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He also took exception to medical aid schemes holding in reserves close to R60bn.

There is a statutory requirement that the schemes hold 25% of income in reserves to cater for emergencies.

"Our bone of contention is that R60bn is equivalent to 33% of reserves and is unnecessary accumulation."

The bill will also abolish penalty fees for late joiners. "Under the NHI, there will be no penalty for late joining."

In most retirement cases, a spouse cannot continue with the scheme until they themselves register as the principal member.

The transition is expected to take approximately 15 years in three phases. Phase two began in 2017 and will end in 2022. In theory, the system should finally be ready by 2026, Motsoaledi said.

Constitutionally, South Africans will still be able to choose a private healthcare option if they so preferred, he said.

The fee for NHI however will be mandatory, meaning those opting for private healthcare will have to effectively pay for both.

To find the gazetted bill, click HERE.

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