National Health Insurance Scheme Approved in South Africa

A national health insurance proposal aimed at overhauling weak public facilities that serve more than 80 percent of the population has been approved in South Africa on Thursday.

"We are building a health system that will offer decent health care for all our people. This is a right that large numbers of South Africans, over many generations, have never known," said Health Minister Aaron Motsoaledi.

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Health insurance has emerged as one of the fastest growing segments in the non-life insurance industry with 30% growth in 2010-11 with annual premium collections being over Rs 6,000 crores.

Details of the National Health Insurance (NHI) scheme, which will be piloted in 10 areas next year and rolled out nationally over 14 years, will be published on Friday.

The ruling African National Congress last year estimated the fund would cost 128 billion rand ($18 billion, 12.5 billion euros) in 2012, rising to 267 billion rand in 2020.

Finance Minister Pravin Gordhan told a press briefing on Thursday that it will be funded through various sources including tax revenue, mandatory contributions from employers, and co-payments from individuals for services not covered by the scheme, and potential partnerships with the private sector.

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South Africa's quality health services are currently heavily skewed toward the more expensive private sector.

Some 84 percent of the country's 50 million people depend on public hospitals and clinics, which are greatly overburdened and poorly staffed despite the state's health spending accounting for 8.5 percent of gross domestic product.

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"It is true that the quality of care in public health institutions is often totally unacceptable and that radical measures are needed to put matters in order," said Motsoaledi.

The long-awaited proposal has drawn controversy over fears about costs and threats to the private health care industry.

But Motsoaledi said the scheme was not a war between the public and private sectors and that the government did not aim to abolish private health insurance. Individuals would still be able to enroll in private medical aid schemes, but would continue to have to pay NHI contributions.

The proposal was approved by the cabinet on Wednesday and will be gazetted for public comment on Friday before draft legislation is developed.

Source-AFP