President Cyril Ramaphosa signed the NHI Bill into law on Wednesday. (@Presidency_ZA/X)
President Cyril Ramaphosa on Wednesday brushed off detractors of National Health Insurance (NHI), saying that any financial hurdles it faced could be navigated with “careful planning, strategic resource allocation and a steadfast commitment to achieving equity”.
He was speaking at the Union Buildings in Pretoria before signing into law the controversial NHI Bill, which critics have called “flawed” in its current iteration and a “populist policy” to garner votes at the 29 May polls.
After intimating that the detractors of the bill were white and privileged – something he had said on Tuesday – the president softened his tone when ending his speech, saying there should not be anxiety associated with the scheme, and that it would be “phased in”, with key milestones in each phase.
“Some fear that ‘boom’, it’s just going to happen. Take heart and courage [and know that] it will be phased in so every sub-milestone becomes an important one to make NHI more effective,” he said.
Ramaphosa did not mention where the money would come from to fund the scheme. “The way it will be paid for … is meant to contain comprehensive costs …” he fumbled, in turn reading from his prepared speech and speaking off the cuff.
Prior to this, he said the “real challenge” in implementing the scheme lay not in a lack of funds “but in the misallocation of resources that currently favours the private health sector at the expense of public health needs”.
Funding for the NHI has become a source of speculation for over-burdened taxpayers, with estimates that R200 billion is needed to fund it – an amount that is out of reach.
According to a February statement from health services group Discovery, if VAT is used to secure the amount, it would have to be increased from 15% to 21.5%. If personal income tax is used, taxes would need to be increased by 31%.
Should the R200 billion be collected as part of payroll tax, there would need to be a deduction of about R1 072 per employee each month, which will increase to about R1 565 for those in the formal sector.
The bill was tabled in August 2019 but discussions about universal health care have been ongoing for two decades.
Business Leadership South Africa (BLSA) chief executive Busi Mavuso on Tuesday questioned whether appropriate consultation had taken place on the bill, saying if there had been such, changes would have been made given the vast number of detractors. Mavuso said the BLSA supported universal access to quality healthcare, but the bill in its current form was not workable.
“The government is rushing populist policy through parliament, which can only be seen to be an electioneering ploy, as the significant and meaningful public input into the NHI bill and its socioeconomic ramifications have not been considered,” she said.
In his speech on Wednesday, Ramaphosa said the NHI would reduce poverty and inequality, thereby “freeing up resources in poor families for other uses”.
“Achieving equity was what the struggle against apartheid was all about, and it continues to be about that. We cannot have a situation where a portion of the population lives under a poor system, and another under a privileged system.
“For those who would like to enjoy those privileges, you are on the wrong boat. The boat we are on is equality,” the president said, to cheers from the audience.
Later, he likened the government’s NHI ambitions to “trying to build a Rolls Royce system for all South Africans”.
On Monday, when Ramaphosa made it known that the bill would be made an Act, trade union Solidarity said it would “within an hour” of it being signed into law, start legal proceedings.
The South African Health Professionals Collaboration has also said it would approach the courts on behalf of its 25 000 public and private sector members.
Those opposing the NHI have said they are in favour of quality universal health care, but that the bill in its current form does not guarantee that, and also severely limits the scope of private medical aids.
While stating it fully supports “the objective of universal health coverage”, Business Unity South Africa said it would consider legal action because the current iteration of the bill was “unworkable, unaffordable, and not in line with the Constitution”.
The Democratic Nursing Association of South Africa (Denosa) has welcomed the signing of the bill, but said the country’s shortage of nurses still needs to be addressed. Labour federation Cosatu, of which Denosa is an affiliate, has also welcomed the signing, as has the National Education, Health and Allied Workers’ Union and others.
The Democratic Alliance has already signalled its intention to challenge the scheme in court, saying Ramaphosa’s signing of the bill was an act of “sheer political desperation”.
“After months of ignoring the ongoing implosion of ANC support, the party has finally realised that its 50% majority will become a thing of the past at the election on the 29th of May,” party leader John Steenhuisen said on Tuesday.
“Out of desperation, it cast around for any populist lever it could pull in the hopes of magically boosting its terminal fortunes.”
The Economic Freedom Fighters last year called the passing of the bill by the National Assembly “catastrophic”, with its main concern being that its beneficiaries were not close to healthcare facilities.
The Inkatha Freedom Party has said it would lead a process of reviewing the NHI and its funding model, while ActionSA has said that by signing the bill into law, Ramaphosa would be enabling “a second phase of state capture”.