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National Health Insurance for South Africa

Reading Time 5 minute read

Life Sciences Bulletin

On 11 December 2015, the Minister of Health published a White Paper on national health insurance (NHI). This White Paper describes NHI as a “health financing system that is designed to pool funds to provide access to quality, affordable personal health service for all South Africans”.

This note is the first in a series dealing with the proposed policy on national health insurance in South Africa. It describes the legislative procedure followed by government in enacting legislation and gives some background on the terms such as a “Green Paper”, a ‘White Paper” and a bill. This will enable members of the life sciences industry to plan their future strategies accordingly.

NHI - publications thus far

On 11 December 2015, the Minister of Health published a White Paper on national health insurance, headed “National Health Insurance for South Africa – towards universal health coverage”.

Interested persons have a period of three months from date of publication of the notice to submit substantiated comments or representations on this proposed policy to the director-general of health.

At the same time, the Minister published the terms of reference for six work streams “to provide technical support in the finalisation of the implementation plan for NHI”.

This White Paper was preceded by a Green Paper of 12 August 2011, which was headed “National health insurance in South Africa – a policy paper”.

A Green Paper and a White Paper?[1]

The constitution empowers the President and Cabinet to develop and implement national policy as well as to prepare and initiated legislation.

To encourage public debate on an issue, the relevant government department will draw up and publish a discussion document called a “Green Paper”. This document sets out the current thinking of the government on a particular issue in broad terms. It is then published for comment.

After the receipt and consideration of the comments, the policy is drafted and submitted to Cabinet for approval. If Cabinet approves the policy, a more refined discussion document is published called a White Paper.

According to the White Paper, over 150 written submissions were received from interested individuals and organisations in response to the Green Paper and they were “carefully reviewed and considered” as part of the drafting of the White Paper. As part of the Green Paper consultation process, national and provincial roadshows were held – which involved more than 60 000 people spanning over a period of four years. In addition, consultative meetings and workshops were held, some involving international experts.[2]

Why the names? As can be expected, the Green Paper was historically printed in the UK on green paper. The White Papers were historically published without covers and were bound in plain white paper. Like cricket, South Africa inherited these traditions.

Next steps

As mentioned in the White Paper, new legislation will be passed in order to implement this policy on NHI.  However, the terms of reference published on 11 December refer to a fifth work stream whose job is to finalise the NHI Policy paper for public release by Government. The White Paper states that the task of this stream is to complete the NHI policy paper and the NHI Bill.

The White Paper refers to amendments to the Medical Schemes Act, legislation for the establishment of an NHI Fund (by way of an NHI Act), amendments to the National Health Act and amendments to relevant municipal legislation and of course amendments to legislation will be necessary for the funding of the NHI Fund. The NHI Fund will be publicly administered/owned and established through legislation as an autonomous public entity. Its functions are mentioned on page 61 of the White Paper and it includes various units such as a Price Determination Unit.

This legislation will be drafted by the relevant government departments and submitted to Cabinet for its approval. Thereafter it proceeds to Parliament to be enacted. The draft legislation known as a Bill has to be passed by Parliament and signed (assented to) by the President before it becomes law, when it becomes known as an Act.

Even if the process involving Green and White Papers is used, draft legislation can also be published for public comment as well. In fact, the rules of the National Assembly generally require that a Bill must be published for public comment in the Government Gazette together with an explanatory summary. These comments are made to the relevant portfolio committee.

Time frames?

The Green Paper envisaged a three phase process with the first to end in 2104, the second in 2020 and the third in 2025. Admittedly, under this document the White Paper was due to be released in August 2011.

The White Paper released on 11 December 2015 also has three phases, being

  • Phase 1 – to be completed during the 2017 financial year.

This will include strengthening the current health system and the creation of a project team through the NHI work streams which will oversee phases for the establishment of an NHI fund and other preparatory work such as moving central hospitals to a national competence and establishing various institutions such as the Office of Health Standards Compliance and the National Health Commission;

  • Phase 2 - to be completed during the 2021 financial year.

This phase will include purchasing services to be funded by NHI (from both public and private providers at the public health service level), reviewing state subsidies to medical schemes (for example GEMs, Polmed, Parmed and other schemes to which the state makes contributions as an employer) in order that such subsidies will be reallocated the NHI Fund; finalising the NHI Fund and establishing its management and governance structures and also amending the Medical Schemes Act.

  • Phase 3 – to be completed during the 2025 financial year.

This phase will include introducing the mandatory prepayments for the NHI Fund, contracting with accredited private hospital and specialist services, implementing the amendments to the Medical Schemes Act.

[1] See “The New Constitutional and Administrative Law – volume 1 by Currie and de Waal, published by Juta, also the website of the Parliament of the Republic of Africa.

[2] paragraph 26 (Page 4) of the White Paper.


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