NHI in South Africa: Why Medical Aid Members Can’t Afford to Drop Their Cover Yet

The promise of free healthcare vs today’s reality

When President Cyril Ramaphosa signed the National Health Insurance (NHI) Act into law in May 2024, it was hailed as the first real step toward universal healthcare in South Africa. The idea was simple and appealing: one national fund, free access to care, and no more fear of medical bills destroying households.

But more than a year later, the NHI is still just words on paper. The framework exists, yet implementation is stalled by court challenges, unanswered questions about funding, and a lack of basic infrastructure to make the system work. For now, South Africans who rely on medical aid still need to keep their memberships intactand even consider adding gap cover for extra protection.

Legal battles already shaping the rollout

Far from being rolled out, the NHI is bogged down in litigation. Medical schemes, doctors, and professional groups are challenging the law on constitutional grounds, arguing it limits rights such as freedom of association and the right to access healthcare.

In 2024, the Gauteng High Court even struck down legislation aimed at controlling where doctors could practice, hinting at how courts may treat broader NHI provisions. An appeal on that ruling was heard just this September, and many expect a long legal road ahead.

The numbers don’t add up

Even if the legal dust settles, money is the elephant in the room. Estimates put the annual cost of running the NHI between R300 billion and R460 billion. South Africa’s debt already stands at over 75% of GDP, economic growth is sluggish, and the tax base is shrinking.

“Even the most modest phase of implementation requires financial discipline and growth, neither of which currently characterises the South African economy,” warns Tiago de Carvalho, CEO of Ambledown Financial Services. In plain terms: the plan is ambitious, but the country simply doesn’t have the money to fund it.

Why private healthcare isn’t going anywhere

For that reason, industry experts believe the NHI won’t replace private healthcareit will complement it. At best, South Africa is heading toward a hybrid system where the NHI runs alongside medical aids and additional insurance products.

This mirrors what has happened in countries like the UK, where the NHS coexists with private insurance. The difference is that South Africa is starting from a much weaker base, with state hospitals already under immense pressure.

The rise of gap cover

With medical inflation outpacing scheme increases, even those with medical aid often face massive shortfallswhether it’s for specialists, hospital procedures, or emergency care. That’s where gap cover comes in.

“Gap cover provides protection now, not years down the line,” says de Carvalho. Demand for it has been rising steadily as families realise medical aid alone isn’t enough. In fact, the delays in NHI rollout are only making gap cover more relevant, not less.

Looking to the next decade

The government’s initial timeline suggested the NHI would be phased in between 2024 and 2028. But with no clear funding mechanism, no contracting units in place, and no defined provider accreditation process, that timeline already looks unrealistic.

For the foreseeable future, South Africans can expect the following:

• Medical aid will remain the backbone of private healthcare.

• Gap cover will grow in importance to close shortfalls.

• NHI may start with small pilot projects but won’t meaningfully replace private healthcare any time soon.

By 2030, a hybrid system looks almost inevitable. Families who plan ahead will be far better positioned to navigate the uncertainty.

The bottom line for South Africans

Universal healthcare is a noble vision, and few would argue against its principles. But the road to achieving it in South Africa is steep and winding, and households can’t afford to gamble on promises.

“The reality is, healthcare emergencies don’t wait for policy certainty,” de Carvalho cautions. For ordinary South Africans, that means one thing: keep your medical aid, consider gap cover, and make sure your family is protected today, because tomorrow’s NHI may still be a long way off.

{Source: BusinessTech}

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