• The CEO of Discovery has said in a letter to customers that the full implementation of the NHI Bill will likely take decades, and will not impact private medical aid schemes.
• He adds that the Bill will likely face numerous legal challenges causing significant delays in its actual launch.
• Government says the NHI will receive funding from the salaries of South Africans, similar to how the UIF works.

President Cyril Ramaphosa is expected to sign the National Health Insurance (NHI) Bill into law on Wednesday. The controversial bill has received both praise and criticism and is said to be a driver of major change across South Africa’s healthcare and medical aid systems.

The NHI is being rolled out with the intention of providing universal healthcare to all South Africans, but the initiative is aiming specifically to aid the large population of South Africans living in poverty to have access to quality healthcare.

But the bill is convoluted, especially in terms of how it will affect South Africans who are already paying for and are using medical aid to access quality healthcare since it is said to “replace” all other medical aid schemes.

One of the largest medical aid providers in the country, Discovery, has been sending out emails to its customers in the last few days in attempts to educate them on how the bill will actually impact South Africans going forward, and what it thinks of the NHI system in general.

Discovery CEO says the NHI won’t impact medical aid schemes for the foreseeable future

In a letter the CEO of Discovery Health, Ron Whelan, explains to customers that despite the bill now being passed and signed into law by the president, its full practical implementation “remains a long way off – several years at least,” he says. “Likely decades,” he adds.

The bill will also likely face more delays due to legal challenges it is expected to encounter in the coming months, due to “significant flaws” within and in the process in which it was steamrolled through Parliament.

He says that in the meantime, medical aid schemes and the private healthcare system will continue to operate as always, without any changes to Discovery Health or other medical aid schemes administered by Discovery Health.

“In other words,” he says, “There will be no impact on medical scheme members or healthcare providers across the health system.”

It is clear that Discovery has taken a keen interest in the NHI and the legal systems surrounding it. In the letter, Whelan cites sections in the bill which are open to interpretation. He says that Section 33 of the NHI bill says that only when the bill is fully implemented will private medical aid schemes be limited in South Africa.

They will then be used to cover benefits and services not reimbursable by the NHI, but since the timeline by which full implementation is not set, and these benefits and services are not defined by the bill, Whelan says that Discovery will continue operating like normal despite the NHI, until they are defined.

The NHI has no real funding plan yet and will likely be delayed

Whelan continues in the letter that Discovery does not see a future where the full implementation of the NHI is possible. “Critically, the largest barrier to implementation of a workable NHI is funding. There is no funding plan yet,” he says.

Whelan believes that given the country’s constrained financial position, and its relatively small amount of taxpayers, the NHI’s funding problems will only be solved in the “longer term.”

“We unfortunately see no scenario in which there is sufficient funding for a workable and comprehensive NHI in its current form – hence our conviction that private sector collaboration is vital, and the role of medical schemes will remain significant going forward,” Whelan explains.

According to the government, the NHI will be funded through general taxation, “contributions of persons earning above a set amount,” and monthly contributions made by employees to the fund. These monthly contributions will be collected from employers in South Africa from salaries, similar to how the UIF works.

That means that most South African salaries will now be taxed, have funds removed for UIF, and have more funds removed for the NHI.

Whelan says that the NHI bill contains “significant technical and constitutional flaws” but that Discovery believes a workable NHI and universal health coverage is possible, with private sector collaboration, of course.