Latest news with #HealthFundersAssociation
eNCA
4 days ago
- Health
- eNCA
Health Funders Association challenges NHI Act over cost and constitutionality
JOHANNESBURG – The Health Funders Association (HFA) is mounting a legal challenge against key aspects of the newly signed National Health Insurance (NHI) Act, citing serious constitutional and economic concerns. HFA CEO Thoneshan Naidoo says while the organisation supports the goal of universal healthcare, the current NHI framework is fundamentally flawed. 'The debate around national health insurance has been ongoing for years,' said Naidoo. 'Unfortunately, despite consistently raising our concerns, we've now been forced to take legal action.' The HFA commissioned an independent expert to assess the economic impact of implementing the NHI as it currently stands. The findings are stark: For South Africa to provide the same level of care promised under the NHI -- equivalent to what private medical schemes currently offer -- it would require the country's 7.4 million taxpayers to double their current tax contributions , a cost Naidoo says is simply unaffordable. In addition to the financial strain, Naidoo highlighted a massive shortfall in human resources. 'To provide the same level of care across the population, we would need an additional 286,000 healthcare professionals, which the country currently does not have,' he added. Naidoo maintains the Act, in its current form, is economically unsustainable and constitutionally questionable, and does not align with the realities of South Africa's healthcare infrastructure. The legal challenge is expected to intensify debate around the future of healthcare reform in the country.
The Citizen
4 days ago
- Health
- The Citizen
Experts warn NHI is economic suicide
Lower earners could face marginal tax rates of 41%, sparking concern that NHI funding will punish the most vulnerable. Research just released by the Health Funders Association (HFA) is the most-stark warning yet that the ANC's push to implement the National Health Insurance (NHI) is not only doomed to failure, it is going to drag down our economy with it. The HFA commissioned Genesis Analytics – an independent economic consultancy with experience in over 115 countries – to build a financial and economic model to test the viability of NHI and to compare the system with those in similar, middle-income countries. The analysis was that, for NHI to fund a level of care equivalent to what medical scheme members now receive, personal income tax would have to increase by 2.2 times (a 115% increase in tax) from the current average rate of 21% to an average of 46% of income. This would push marginal tax rates in the lowest income bracket from 18% to 41% and in the highest bracket from 45% to 68%. ALSO READ: Health funders also heading to court about NHI Act HFA estimated that were VAT used, it would have to increase from 15% to 36%. Even a hybrid public-private system would require personal income tax to increase by 47%. HFA is going to court to fight the proposals – and they aren't the only ones. This is simply financial madness. NOW READ: Health minister defends nearly R10 million legal spend on NHI court battles
Mail & Guardian
5 days ago
- Business
- Mail & Guardian
Health association takes legal action against NHI Act
File photo by James Oatway The Health Funders Association this week launched a legal challenge against the President Cyril Ramaphosa The ANC, which governed the country solely until being forced into a national coalition after the polls, says the NHI is intended to provide universal and comprehensive health coverage to all South Africans. But it has faced fierce criticism from the private healthcare sector and parties such as the Health Funders Association chief executive Thoneshan Naidoo acknowledged this week that 'South Africa needs a healthcare system that delivers equitable, quality care to all [and] we fully support that vision.' But he added: 'In its current form, and without private sector collaboration, the NHI Act is fiscally impossible and operationally unworkable, and threatens the stability of the economy and health system, impacting everyone in South Africa.' The association filed its application at the Pretoria high court, joining five other medical entities that are fighting the law. The It argued that the framework in its current form was not fiscally feasible and would also have adverse effects on South Africa's healthcare and economic outcomes. 'The steep tax increases required to fund the NHI will reduce disposable income, curb consumer spending across all sectors of the economy and may well trigger an exodus of high-income taxpayers,' it said. 'At the same time, destabilising the private healthcare sector will deter investment, put jobs at risk, and slow The association's position is premised on a report by Genesis Analytics, published this week, which showed that the 'NHI Act requires unsustainable tax increases while reducing healthcare access for medical scheme members'. It said the analysis also revealed South Africa's racially diverse medical scheme membership, in which more than 68% of members are black, Indian or coloured, and up to 83% earn less than R37 500 a month. 'The proposed NHI would, therefore, disproportionately impact working-class households who currently rely on medical schemes for quality care.' Modelling by Genesis Analysis showed that it would be impossible to raise the funds required for NHI, 'even under the most optimistic assumptions'. 'For NHI to fund a level of care equivalent to what medical scheme members currently receive, as government has indicated is the intention, the Genesis model shows that personal income tax would need to increase by 2.2 times (a 115% increase in tax) from the current average rate of 21% to an average of 46% of income.' This, it said, would push marginal tax rates in the lowest income bracket from 18% to 41%, and in the highest bracket from 45% to 68%. Building its case, the association said the Genesis model projected that more than 286 000 additional healthcare professionals would be required to fulfil the NHI vision. This is more than twice the number of general practitioners, nurses and pharmacists and three times the number of specialists. 'NHI will therefore place significant pressure on healthcare workers and addressing these capacity gaps will require significant time and investment,' the association said. Naidoo added that South Africa does not have enough skilled workers to deliver the NHI's mandate. 'By driving down service tariffs, the NHI risks accelerating the emigration or exit of healthcare professionals from the sector altogether.' The country is already facing a medical professional 'brain drain'. A survey conducted last year by the South Africa Medical Association, which represents approximately 17 000 doctors across South Africa, showed that as many as 38% of its members intended to leave the country in response to the implementation of the NHI scheme. Last month, Ramaphosa defended the Act after the Board of Healthcare Funders, which represents most private medical schemes, said he flouted his constitutional duty by failing to scrutinise its constitutionality when he signed the NHI into law. It added that the president ignored submissions that pointed to the patent constitutional defects in the legislation. The Pretoria High Court ruled in favour of the board. Ramaphosa launched an appeal, arguing that the court lacked jurisdiction in the matter and erred in finding that his decision to sign the new law was reviewable. The court found no merit in his argument on the separation of powers and said the step of assenting to a Bill was but part of a lawmaking process that was a reviewable exercise in public power.
Daily Maverick
5 days ago
- Health
- Daily Maverick
Health Funders Association launches latest legal challenge to NHI Act, calling legislation ‘unworkable'
The Health Funders Association is the sixth organisation to launch a legal challenge to the NHI Act, describing it as 'unaffordable, unworkable and unconstitutional'. The Health Funders Association (HFA), a nonprofit representing 20 medical schemes and three administrators in South Africa's private healthcare funding sector, has become the latest organisation to launch a legal challenge to the National Health Insurance Act. On Thursday, 5 June the HFA announced the challenge, which has been lodged in the Gauteng Division of the High Court in Pretoria. The organisation has said that while it supports the 'goal of universal health coverage', it considers the NHI Act to be 'unaffordable, unworkable and unconstitutional'. 'Litigation is not our preferred route but it is, under these circumstances, the responsible one to protect our economy and the future of healthcare in our country,' said NFA chief executive Thoneshan Naidoo. Unconstitutional and invalid In its legal challenge, the HFA argues that the NHI Act is procedurally and substantively flawed and will cause irreparable harm to the health system economy. It also seeks to show that: Section 33 of the NHI Act, which limits the role of medical schemes to providing complementary cover, infringes on section 27 of the Constitution regarding the right to access healthcare; The Act is not a 'reasonable measure' under section 27(2) of the Constitution, which stipulates that the government must take progressive, reasonable steps to realise access to care; and The Act unconstitutionally delegates legislative authority to the minister of health. Naidoo said that the relief sought by the HFA in the high court was for 'certain sections of the NHI Act be declared unconstitutional and invalid. Alternatively, the Act, in its entirety, to be declared unconstitutional and invalid.' There are already five legal challenges to the Act playing out in South Africa's courts, led by the South African Medical Association, the Board of Healthcare Funders, the Hospital Association of South Africa, the South African Private Practitioners Forum and the trade union Solidarity. 'With our knowledge, skills and experience of the funding industry… we bring an understanding of what the flaws are [in the NHI Act], what path we're on and alternative solutions. We don't view ourselves in opposition, but as part of completing the solution,' Naidoo told Daily Maverick. He noted that the HFA had engaged with the NHI through public participation processes before it was signed into law, in an attempt to work collaboratively with stakeholders. 'We are a part of Busa [Business Unity South Africa]… and while we go ahead with this legal challenge, we are hoping that through Busa… and that ongoing engagement with the president, it can lead to some amicable solution,' Naidoo said. Health Department spokesperson Foster Mohale said the department would study the HFA's application once it had received it and 'respond accordingly through the legal channels'. Independent study Part of the reason the HFA's legal challenge was launched more than a year after the NHI Act was signed into law was to allow time to research the potential impact of the legislation, said Naidoo. The organisation commissioned an independent economic analysis by consultancy firm Genesis Analytics. 'The Genesis analysis assesses various potential efficiency savings under NHI compared to the current system. For modelling purposes, savings are assumed to be as high as 45% of private sector cost levels. The report demonstrates that even under the most optimistic assumptions, it is not possible to raise the funds required for NHI,' the HFA said. 'For NHI to fund a level of care equivalent to what medical scheme members currently receive, as government has indicated is the intention, the Genesis model shows that personal income tax would need to increase by 2.2 times (a 115% increase in tax) from the current average rate of 21% to an average of 46% of income.' The Genensis model considered a scenario of pooling existing healthcare expenditure in the private and public sectors to support NHI. Its finding was that to enable this, personal income tax would need to increase by 1.5 times its current rate (a 47% increase in tax), from its average of 21% to 31%, according to the HFA. The report stated that medical scheme members would face a 43% reduction in the level of healthcare services relative to what they currently receive. When breaking down who would be affected by the potential decline in services under the NHI, Naidoo said the Genesis analysis showed that more than 68% of medical scheme members were black, Indian or coloured, with up to 83% earning less than R37,500 per month. 'There's often a misconception that medical schemes are for the wealthy and the elite. But if 83% are earning less than R40,000, it means this is actually your economic engine of South Africa. This is your workforce,' Naidoo said. Another finding of the study was that an additional 282,000 healthcare professionals would be needed to achieve the same level of care and access under the NHI than is currently experienced through medical schemes. 'Every year, we only get about 3,600 new medical graduates. Qualifications take between nine to 13 years… so the targets are decades away,' Naidoo said. Pursuing meaningful reform Naidoo said the HFA was not seeking to preserve the status quo, since it believed meaningful reform was essential to improve affordability, quality and access in healthcare. 'We remain committed to working with government and stakeholders to design a more inclusive, financially viable and constitutionally sound [system],' he said. 'Almost all successful [universal healthcare coverage] models, whether it's in high-income, middle-income or even low-income countries, involve strong public-private sector collaboration… Rather than sidelining the private sector, these systems leverage its capacity, innovation and infrastructure to expand access, improve efficiency and enhance quality of care.' The HFA has proposed a 'hybrid funding model' that involves the NHI fund and medical schemes operating 'in tandem'. It argues that this system would preserve individuals' 'freedom to choose supplementary private cover'. 'Public resources are focused on those most in need, while regulated competition supports innovation, efficiency and cost control,' it said. 'The proposed model offers a common benefit package with built-in cross-subsidisation to ensure equitable access for vulnerable populations. Grounded in a strong primary healthcare foundation, the model reflects international best practice and is especially relevant for middle-income countries like South Africa.' Other organisations have proposed alternative models to the NHI fund, including the Universal Healthcare Access Coalition, made up of the South African Medical Association, the Progressive Health Forum and the South African Private Practitioners Forum. Naidoo noted that a 'common thread' in many of these healthcare reform proposals was the emphasis placed on 'multifund, multipayer systems' rather than a single-fund monopoly. DM
The Citizen
5 days ago
- Health
- The Citizen
Health funders also heading to court about NHI Act
The Health Funders Association was established in 2015 to represent 20 medical schemes and three administrators in South Africa's private healthcare funding sector. The Health Funders Association (HFA) is also heading to court to challenge the constitutionality of the NHI Act and is asking the Gauteng High Court to set it aside because it is also unaffordable and unworkable. The Medical Association, Board of Healthcare Funders, Private Practitioners Forum and Hospital Association have already initiated legal steps against NHI. Before launching the court case, the HFA also commissioned a study to build a financial and economic model to test the viability of National Health Insurance (NHI) under different assumptions and determine a viable pathway towards a workable NHI. The HFA covers 46% of the private healthcare market, equivalent to approximately 4.1 million beneficiaries. 'South Africa needs a healthcare system that delivers equitable, quality care to all. We fully support that vision. However, in its current form and without private sector collaboration, the NHI Act is fiscally impossible and operationally unworkable, while it also threatens the stability of the economy and health system, affecting all South Africans,' Thoneshan Naidoo, CEO of HFA, says. ALSO READ: SAMA launches most comprehensive constitutional challenge yet to NHI Act Health funders going to court to help ensure national health reform 'HFA is taking this legal step not to delay progress, but to help ensure that national health reform is grounded in constitutional principles, financial realism and patient choice. We continue to advocate for a more inclusive, hybrid funding model that incorporates medical schemes in NHI. We believe such a model would expand access to care while protecting the rights of all South Africans.' The NHI Act centralises control of all healthcare financing in a single, state-run fund, removing the ability of medical schemes to offer cover for healthcare services reimbursable by the NHI. Naidoo says this effectively outlaws the constitutional right of citizens to choose how to access or fund healthcare beyond what the state provides. He points out that independent economic modelling shows that funding the intended benefits in the current NHI framework would require unprecedented increases in tax at levels far beyond South Africa's fiscal capacity. 'The proposed model offers no guarantee of improved outcomes, while restricting the mechanisms that currently drive quality and innovation in healthcare.' ALSO READ: Private hospitals also taking NHI fight to court as Motsoaledi talks 'war' Financial and economic model of NHI HFA commissioned Genesis Analytics, an independent economic consultancy with experience in more than 115 countries, to build a financial and economic model to test the viability of NHI and compare NHI, including its anticipated prohibition of most forms of private health insurance, to systems in other countries, such as South Africa's middle-income peers. Genesis was also requested to identify measures that would improve the affordability of NHI overall and address its negative impact on medical scheme members. The report, released today, unequivocally demonstrates that the NHI Act requires unsustainable tax increases while reducing healthcare access for medical scheme members, Naidoo says. 'Critically, the Genesis analysis also reveals the diverse profile of South Africa's medical scheme membership with more than 68% of members who are black, Indian or coloured and up to 83% earning less than R37 500 per month. 'The proposed NHI would therefore disproportionately impact working-class households who currently rely on medical schemes for quality care.' The Genesis modelling showed that the NHI Act is fiscally impossible and that even under the most optimistic assumptions, it is not possible to raise the funds required for NHI. ALSO READ: Private Practitioners' Forum also disputing constitutionality of NHI Act Health funders warn about 115% increase in tax to fund NHI For NHI to fund a level of care equivalent to what medical scheme members currently receive, as government indicated the intention is, the Genesis model shows that personal income tax would have to increase by 2.2 times (a 115% increase in tax) from the current average rate of 21% to an average of 46% of income. This would push marginal tax rates in the lowest income bracket from 18% to 41% and in the highest bracket from 45% to 68%. While VAT is not mentioned in the NHI Act as a means to raise funding for NHI, HFA estimated for illustrative purposes that VAT would have to increase from 15% to 36%, which is completely unrealistic, Naidoo says. The Genesis model also considered a scenario of pooling existing private and public healthcare expenditure. To enable this, personal income tax would have to increase by 1.5 times its current rate (a 47% increase in tax) from its average of 21% to 31%. Naidoo points out that at the same time, medical scheme members would face a 43% reduction in the level of healthcare services compared to what they currently receive. 'In simple terms, the equation for medical scheme members therefore becomes a matter of 'Pay 1.5 times more tax for 43% less healthcare'. 'Such tax increases are fiscally impossible, particularly given South Africa's narrow personal income tax base of 7.4 million taxpayers. In addition, this would result in healthcare expenditure accounting for 22% to 33% of total annual government expenditure, well above any global standard and with no additional allocation to other critical areas of government expenditure.' ALSO READ: NHI regulations 'prematurely' published with legislation not proclaimed yet Tax to fund NHI will reduce disposable income, health funders say 'The steep tax increases required to fund NHI will reduce disposable income, curb consumer spending across all sectors of the economy and may well trigger an exodus of high-income taxpayers. At the same time, destabilising the private healthcare sector will deter investment, put jobs at risk and slow gross domestic product (GDP) growth in a sector that contributes over 4.3% to South Africa's GDP.' The economic analysis also shows that NHI could reduce the availability of medicines and health services, while it will need more than 286 000 additional healthcare professionals. For members of medical aid schemes, the NHI Act will mean a reduction of access to healthcare for South Africa's 9.1 million medical scheme members because NHI will not offer the same level of access and quality, Naidoo says. 'The NHI Act will prohibit individuals from using their own funds to buy private medical scheme cover for services included in the NHI, removing their right to supplement public provision with private care. 'The NHI Act contravenes the state's obligation in section 27(2) of the Constitution to adopt reasonable measures to achieve the progressive realisation of the constitutional right of everyone to access healthcare services within available resources.' Naidoo says it is important to remember that the analysis shows that this prohibition is not necessary to achieve the equity objectives of the NHI Act, as the prohibition will channel public resources into higher-income population segments and could deliver worse outcomes for uninsured people. ALSO READ: Health minister defends nearly R10 million legal spend on NHI court battles Health funders want a hybrid multi-fund model that includes NHI and medical aid schemes Therefore, the HFA would like to see a hybrid multi-fund model that includes NHI and medical aid schemes. The HFA's proposed hybrid funding model allows the NHI Fund and medical schemes to operate in tandem, preserving individuals' freedom to choose supplementary private cover which is an essential feature of most effective universal health care systems worldwide where public resources are focused on those most in need, while regulated competition supports innovation, efficiency and cost control. The proposed model offers a common benefit package with built-in cross-subsidisation to ensure equitable access for vulnerable populations. Grounded in a strong primary healthcare foundation, the model reflects international best practice and is especially relevant for middle-income countries like South Africa. 'The hybrid multi-fund model is a practical solution for South Africa. It offers a faster, more affordable and lower-risk route to achieving universal health coverage through progressive reform, strengthening public healthcare while leveraging private sector funding and capacity to expand access and drive innovation.'
