PRETORIA (Reuters) – South Africa’s President Cyril Ramaphosa signed into law on Wednesday a bill that aims to provide universal health coverage, hailing it as a major step in the journey towards a more just society although critics say they will challenge it in court.
Ramaphosa has vowed to reform South Africa’s two-tier health system, in which a publicly funded sector that serves 84% of the population is overburdened and run-down, while some people have access to better treatment through private insurance.
His signing of the National Health Insurance (NHI) bill, which was passed by parliament last year, comes two weeks before an election in which the ruling African National Congress (ANC) is fighting to retain its parliamentary majority after 30 years in power.
The bill will gradually limit the role of private insurance, create a new public fund to provide free access for South African citizens, and set the fees and prices that private doctors and healthcare suppliers can charge for NHI-funded benefits.
Supporters call it a generational change to reverse persistent inequality dating to the apartheid era. But opponents say it will be a drain on already stretched public finances, limit patient choice, undermine the quality of care and drive talented doctors out of the country.
Ramaphosa told the reform’s detractors that the current inequalities in healthcare provision could not be allowed to continue.
“For those who would like to see those privileges continuing, sorry, you are on the wrong boat. The boat we are on is about equality,” he said at a signing ceremony at the Union Buildings in Pretoria, the seat of government.
LEGAL CHALLENGES
The main opposition party, the Democratic Alliance, and some labour and business groups plan to challenge the bill in court. Industry and political analysts have said it is likely to get bogged down in lawsuits for years.
The government has said the National Treasury will determine the funding sources for NHI, which will include a mandatory pre-payment system and other forms of taxes.
Big local health insurers like Discovery, Momentum Metropolitan Health and AfroCentric say they support the goal of universal health coverage but they do not agree on the proposed funding model.
“There is no funding plan yet and given the country’s constrained fiscal position, low economic growth and narrow tax base, this can only be solved in the longer term,” said Adrian Gore, group CEO of Discovery.
“We see no scenario in which there is sufficient funding for a workable and comprehensive NHI in its current form.”
The NEHAWU labour union, part of the country’s COSATU federation which is in an alliance with the ANC, urged Ramaphosa and the national treasury to put their full political weight behind the NHI to ensure it is properly resourced.
(Reporting by Nqobile Dludla and Nellie Peyton; Additional reporting by Bhargav Acharya in Johannesburg; Editing by Emelia Sithole-Matarise and Alexander Winning)
