The National Health Insurance Act: Possible private health funding reform scenarios

The passing of the National Health Insurance (NHI) Act was an important milestone in the reform of the South African healthcare system and will have a profound impact on the funding and provision of healthcare in the country. While the impacts will be felt across the entire system, the focus of this article is on the potential impact on the private health funding sector, which currently enables financial risk protection for those with private health insurance. This article highlights some key trends and challenges in this sector from 2007 to 2022 and then examines two possible extreme scenarios for the sector during the NHI transition phases. In the first scenario, a passive' process is assumed. This is characterised as a continuation of the current policy environment, where the sector is allowed to continue a downward trajectory without any specific actions to maintain its viability during the transition. A key risk in this scenario is that the sector becomes unsustainable before the NHI can provide an alternative financial risk protection mechanism to those currently protected through private health insurance. In the second scenario, an active' process is followed, where steps are taken to keep the sector sustainable during the NHI transition. While part of this would include the purposive shifting of government-related funding from the private funding sector to the NHI, other actions would include regulatory and other reforms necessary to keep the private funding sector viable, which would also provide a stronger foundation for the NHI.