Will South Africans still need medical aid when NHI is implemented?

According to an expert, NHI a central fund that will pay for healthcare for all South Africans. Picture: Freepik

According to an expert, NHI a central fund that will pay for healthcare for all South Africans. Picture: Freepik

Published Apr 22, 2024


The National Health Insurance is a policy that South Africans may have heard about, but there are still some important aspects of the policy that they may still be in the dark about, such as what it is and how it will affect them.

While NHI is yet to be implemented, it is essential that South Africans are aware of the impact that it can have on them especially those that have medical aid and medical insurance.

To shine some light, here is a closer at the issue:

What is NHI?

Per the Department of Health (DOH), the NHI is a fund that government will use to purchase healthcare services from healthcare providers in the private and public sector for South Africans.

While Paresh Prema, Head: Technical and Actuarial Consulting Solutions, Alexforbes calls the NHI a central fund that will pay for healthcare for all South Africans.

The fund will make healthcare more affordable for everyone by lowering the cost of healthcare and it will also ensure that South Africans have access to free healthcare when they need it.

NHI is like a medical aid for all which everyone will contribute to through taxes and special contributions, according to the DOH.

Medical aid/insurance

While the NHI bill has not been signed by President Cyril Ramaphosa and it will take around eight to ten years to implement according to Prema, it is essential to clear up any confusion that people who pay for medical aid and medical insurance have.

According to Discovery, the NHI bill states that medical schemes cannot pay for services that are covered by the NHI.

Prema said that once NHI is implemented, people may not see the need for medical aid or medical insurance because they will be covered by the government.

“South Africans will only turn to medical aids or medical insurance if they need for cover for procedures that are not covered by the NHI,” Prema said.

According to Prema, medical aid or medical insurance may offer ‘complimentary cover’. Complimentary cover may refer to elective or cosmetic procedures that NHI will not cover.

While the medical scheme industry will be limited in what they can cover, the do have the potential to exist in a smaller capacity.

Medical tax credits

Regarding medical aid tax credits, it is expected that with the possible need of funding for the NHI, medical aid tax credits could be a thing of the past.

According to Medshield, there are categories of medical tax credits.

The first provides tax credits to taxpayers contributing to a registered medical scheme and the other allows taxpayers to claim tax returns for medical expenses that were not covered by medical that were paid for out of pocket.

Prema said: “People that belong to the lowest income group will be the most affected by the removal of medical tax credits.

Äccording to Prema. without the possible rebate from the taxman for contributing to a medical aid scheme, South Africans may have cancel their medical aids or medical insurance because it won’t be affordable.

It is also a possibility that there would an increase in VAT and payroll taxes to fund the NHI.

Prema said that the Alexforbes does support the NHI because it will offer affordable universal healthcare to everyone.

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